What happened
SoundHound AI (SOUN 0.95%) sure feels like a "right time, right place," stock these days. As its name implies, the company concentrates on artificial intelligence (AI) customer-service voice solutions.
Not only is AI a hot item among investors just now, but SoundHound AI also benefited this week from a glowing analyst note. As a result, S&P Global Market Intelligence says that the company's share price was over 22% higher week to date as of Friday before market open.
So what
On Wednesday, that analyst, Brett Knoblauch from Cantor Fitzgerald, pulled the trigger on a significant SoundHound AI price-target raise. He more than doubled his fair value estimation of the stock to $6.20 from his previous $2.80. Already bullish, Knoblauch maintained his overweight (buy) recommendation on the shares.
This was partly in reaction to comments made by SoundHound chief financial officer Nitesh Sharan at Cantor's annual technology conference last week. This cemented Knoblauch's view that SoundHound AI is better positioned than many other AI-associated businesses to capitalize on the thrilling new technology.
"SoundHound is one of the few companies that can take advantage of the AI frenzy currently occurring at every business across the globe," Knoblauch wrote in a new analyst note.
He added that both of the company's core markets -- the automotive industry (where it provides voice capabilities to assisted-driving systems) and restaurants (help with automated customer service over the phone) -- could bring in more than $500 million annually in revenue. With further uptake of its services and its own innovation, that figure could bounce to $2 billion.
NASDAQ: SOUN
Key Data Points
Now what
SoundHound AI certainly stands tall among AI-associated stocks, with an impressive client list and operations in two segments where demand is at least sustainable.
Yet like numerous AI-powered companies, this recently-listed one has consistently booked steep losses on the bottom line. Investors, then, should exercise caution amid the craze for all things AI.
