What happened

Shares of Veritone, Inc. (NASDAQ:VERI) dipped 11.2% July, according to data provided S&P Global Market Intelligence . However, the sell-off does not appear to have been the result of any company specific news.

VERI Chart

VERI price change. Data source: YCharts.

Tech stocks sold off late in August after Facebook and Twitter each reported second-quarter earnings reports that caused concern among shareholders. Big sell-offs for the two social media companies created concerns about whether tech sector stocks might be broadly overvalued and Veritone's stock price appears to have gotten a haircut as a result.

A brain in the middle of a circuit board.

Image source: Getty Images.

So what

Veritone's business revolves around providing an operating system for a range of artificial intelligence functions including machine vision, transcription, and translation. Whether or not there will be substantial demand for the company's products going forward is somewhat uncertain, and the AI space is already more speculative than most others, so it's not surprising that the company's share price took a significant hit amid a broader industry sell-off. 

The company has a market capitalization of roughly $265 million as of this writing, and small-cap tech stocks are often prone to big swings. Veritone stock was also coming off of big sell-offs that occurred in June spurred by the company putting up more shares for sale, so it's possible that negative sentiment from the previous month contributed to July's stock declines. 

Now what

While the broader technology sector has recovered from the late-July dip, Veritone stock has not regained as much ground. The chart below tracks the performance of the company's share price and that of the Technology Select Sector SPDR fund (which is a good measure for overall sector performance) over the last month:

XLK Chart

XLK price change. Data source: YCharts.

Even with the big sell-offs in June and July, Veritone is still up roughly 70% over the last year and trades at roughly 12.5 times this year's expected sales.