Shares of SoundHound AI (SOUN -0.98%) fell 20.9% in October 2023, according to data from S&P Global Market Intelligence. The speech recognition and song identification expert had no gloomy news to share last month. Instead, the stock continued a lengthy slide that started in late June due to a marketwide retreat from unprofitable and potentially risky growth stocks.

Dissecting the drop: SoundHound didn't do anything wrong in October

The story was pretty much the same in September, as SoundHound's stock posted a 20.2% price drop on no particular news. The October continuation was a wobbly affair, with 10 market days showing a price drop of at least 2%, while the stock gained 2% or more on five occasions.

On that note, SoundHound's stock essentially amplified the moves of the broader market last month. The three sharpest drops came at the start of the Israel-Hamas conflict, at the shaky start to the current earnings season, and on the heels of a weak report from tech giant Alphabet. None of these events were closely connected to SoundHound or its core target markets.

So SoundHound investors kept de-risking their portfolios amid a turbulent economy -- per usual. And that's actually a sensible market reaction, given the company's lack of bottom-line profits.

Looking ahead to Q3 results and long-term growth

Now, SoundHound isn't sitting on its proverbial hands. The company is busy signing more voice control deals in Detroit and Japan, along with a newer flow of partnerships in the fast food and food delivery industries.

These partnerships are not just about expanding SoundHound's market footprint; they are also about refining the technology through diverse applications, from automotive voice commands to seamless ordering systems in the fast-food sector. They're baby steps toward a brighter future.

Like most companies with artificial intelligence (AI) in their official name, SoundHound looks ready to capitalize on the widespread hunger for AI tools in 2023. It just takes some time to generate actual revenue from SoundHound's business-to-business contracts, not to mention how long it takes to produce positive bottom-line profits. The elements of a sustained growth story are all there, but market makers haven't noticed yet.

The company will report third-quarter results on Nov. 9, setting the stage for growth prospects in 2024 and beyond. After three consecutive months of risk-averse trading, the stock is starting to look cheap. Opportunistic investors should consider picking up a few shares while the discount lasts.