SoundHound AI’s shares (NASDAQ:SOUN) experienced a significant downturn on Tuesday afternoon, falling sharply amid a broader market decline that saw the Nasdaq-100 drop by 1.5%. The sell-off has raised concerns among investors, particularly as the company prepares for its crucial third-quarter earnings report scheduled for after market close on Thursday.
The recent retreat in SoundHound’s stock is linked to a broader trend of profit-taking after robust year-to-date performance, which had previously buoyed investor sentiment in the AI sector. The downturn has been amplified by a notable decline in shares of Palantir, even following a strong earnings report, indicating that negative sentiment is impacting the entire AI industry.
SoundHound AI’s third-quarter report follows a record-setting second quarter, during which the company surpassed earnings expectations with revenues of $42.7 million and updated its full-year outlook. Exciting developments for the company include new partnerships with major clients like Red Lobster and French insurer Apivia Courtage.
As investors await the upcoming earnings announcement, analysts have set consensus estimates for a loss of 6 cents per share on revenue of $40.33 million. Despite Tuesday’s decline, financial analysts remain optimistic about SoundHound, with supportive ratings from firms such as H.C. Wainwright, Wedbush, and DA Davidson.
In terms of market performance, SoundHound AI shares plummeted by 10.93%, trading at $15.24 at the time of publication, according to Benzinga Pro data. As the company moves closer to announcing its earnings, many are hopeful that it will continue to build on its recent success and stabilize its stock price.
Investors interested in SoundHound AI may consider acquiring shares through brokerage accounts, which offer options for purchasing fractional shares. For those looking to short the stock, options trading platforms are available, allowing traders to either buy put options or sell call options to profit from a potential decline in share prices.
Overall, while the current market conditions present challenges, many still see a bright future ahead for SoundHound AI as it navigates this pivotal moment in its financial reporting cycle.