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SoundHound AI (NASDAQ: SOUND) Stock prices have moved higher in this week’s trading. The company’s share price closed this week 48% higher than last Friday’s market close, data from S&P global market information.
Car manufacturer Stellantis expanded the integration of SoundHound’s voice-based artificial intelligence (AI) technologies in Europe this week. The development could be a major sales driver for the voice interface software specialist, and investors have piled into the stock in response.
SoundHound’s expansion is increasing in Europe
With an update released this week, Stellantis has made SoundHound’s voice control system available in compatible Peugeot, Opel and Vauxhall vehicles and the technology will now be included in new vehicles from these brands. The software includes OpenAI’s ChatGPT chatbot and was launched for these brands in Germany, France, the UK, Italy and seven other European markets.
By the end of July, SoundHound integration is expected to be launched for Peugeot, Opel and Vauxhall vehicles in a total of 17 European markets. The expanded debut follows the production integration of Stellantis’ premium DS Automobiles brand in March.
In addition to these units, the auto conglomerate also houses companies including Chrysler, Dodge, Fiat and Jeep. It’s possible that other automakers under the Stellantis umbrella will adopt technologies from SoundHound in the not-too-distant future.
What comes next for SoundHound AI stock?
After this week’s explosive gains, SoundHound’s market cap has once again been pushed above the $2 billion mark. On the other hand, the company’s shares are still down about 30.5% from the 52-week high it hit earlier this year.
SoundHound shares have been highly volatile amid a wave of excitement surrounding AI and uncertainty about the company’s long-term sales prospects. After rising about 192% in 2024 trading, SoundHound now trades at about 29 times this year’s expected revenue.
With its latest quarterly report, SoundHound achieved 73% year-over-year revenue growth. The company is showing impressive momentum, but revenue was still relatively small at $11.6 million in that period. The software specialist also posted a net loss of $33 million in the quarter.
The company appears to be establishing and expanding key partnerships, but it remains to be seen whether the company can find a defensible moat and stave off competitive pressure. Given SoundHound AI’s valuation profile and speculative prospects, it is likely that the stock will remain 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 one disclosure policy.
Why SoundHound AI stock skyrocketed this week was originally published by The Motley Fool