SoundHound (SOUN) is a company known for developing voice-enabled AI and conversational intelligence technologies. They offer several key products and services.
Shares of SoundHound traded more than 12% higher on Wednesday scratching their first close above $10 in more than two years.
Wednesday’s move marks the third time that SoundHound stock has notched 10%+ one-day gains since the beginning of November. Over the same period, SoundHound shares have doubled in value from $5 to $10.
Today’s dramatic jump in price was accompanied by heavy volume, signaling an improvement in investor sentiment.
First: stocks that break above $10 often attract a broader group of investors. The price holds psychologically significant value to investors. It also represents a threshold for many institutional investors that are restricted from buying stocks under $10.
Second: in November, NVIDIA’s most recent 13F filing confirmed that the company has maintained its investment in SoundHound.
The stock is now trading 378% higher year-to-date, but shares have struggled during the year.
Investors bought into the stock after NVIDIA’s investment in early March. Shares rocketed to $10 in a bullish frenzy that saw a quick reversal.
By July, SoundHound shares had lost 67% of their value, trading at $3.82.
A slow grinding rally through the late summer turned the stock’s long-term trends bullish, indicating that the stock was gaining momentum. In late August, shares got more attention as analysts at Cantor Fitzgerald upgraded the stock to a strong “Buy”.
Investors can expect to see some profit-taking after SoundHound’s strong November.
A well-timed decline to $9 would shake-off excessive optimism and allow the stock to advance higher as longer-term investors “buy the dip”.
Shares of SoundHound maintain a long-term bullish outlook with a price target of $15.
