SoundHound AI (NASDAQ: SOUN) Shares edged higher in trading this week. The company’s share price closed this week down 48% from last Friday’s market close, according to data from S&P Global Market Intelligence.
Auto- Stellantis expanded the integration of SoundHound’s voice-based artificial intelligence (AI) technologies into Europe this week. The development could be a significant sales driver for the audio interface software specialist, and investors have poured into the stock in response.
SoundHound’s expansion grows in Europe
With an update released this week, Stellantis made SoundHound’s voice-based operating system available in compatible Peugeot, Opel and Vauxhall vehicles and will now include the technology with new vehicles from these brands. The software includes OpenAI’s ChatGPT chatbot and was launched for these brands in Germany, France, UK, Italy and seven other European markets.
By the end of July, the SoundHound integration is expected to be launched for Peugeot, Opel and Vauxhall vehicles in a total of 17 European markets. The extended debut follows the integration of production for Stellantis’ high-performance DS Automobiles brand in March.
In addition to these units, the auto conglomerate also houses businesses including Chrysler, Dodge, Fiat and Jeep. It’s possible that other automakers under the Stellantis umbrella could move to incorporate technologies from SoundHound in the not-too-distant future.
What’s next for SoundHound AI stock?
After this week’s explosive gains, SoundHound’s market cap has once again pushed above the $2 billion mark. On the other hand, the company’s stock is still down roughly 30.5% from the 52-week high it hit earlier this year.
Shares of SoundHound have been highly volatile amid a surge of excitement surrounding AI and uncertainty about the company’s long-term sales outlook. After growing roughly 192% in 2024 markets, SoundHound is now trading at roughly 29 times this year’s expected sales.
With its latest quarterly report, SoundHound delivered 73% year-over-year sales growth. Business is showing impressive momentum, but sales were still relatively small — coming in at $11.6 million in the period. The software specialist also posted a net loss of $33 million in the quarter.
The company appears to be landing and expanding significant partnerships, but it remains to be seen whether the company can create a defensible moat and fend off competitive pressures. Given SoundHound AI’s valuation profile and speculative outlook, it is likely that the stock will continue to be highly volatile in the near term.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.
Why SoundHound AI Stock Skyrocketed This Week was originally published by The Motley Fool
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