Up roughly 178% across 2024's trading, SoundHound AI (SOUN 5.77%) has been one of this year's most explosive artificial intelligence (AI) stocks. In fact, the only high-profile name in the space that has posted bigger gains is Super Micro Computer -- with its share price up roughly 255% across this year's first quarter.
While SoundHound AI stock has already recorded incredible gains in a very short time, at least one analyst thinks that it's on track to head even higher in the near term. In a note published on March 26, Ladenburg analyst Glenn Matson reiterated a buy rating on SoundHound and set a price target of $7 per share on the stock. With the stock closing out Q1 2024 priced at $5.89 per share, that would imply an additional upside of approximately 19%.
Is SoundHound AI stock a buy?
Matson expects that SoundHound will be able to grow its sales at an average annual rate of 50% over the next two years, and that it will shift into profitability on an earnings-before-interest-taxes-deprecation-and-amortization (EBITDA) basis in the second half of 2025. The analyst believes that the company's voice-based artificial intelligence platform will continue to see strong adoption among business customers and points to growing momentum for the company's Pillar II software for restaurants as a bullish indicator.
SoundHound could possibly hit Matson's $7 per share near-term price target, but I think long-term investors should exercise caution. The audio tech specialist is currently trading at roughly 26.2 times this year's expected sales and has an uncertain path to profitability.
Meanwhile, Supermicro is growing sales fast and trades at roughly 3.9 times this year's expected sales and 46 times expected earnings. For AI investors, I think Supermicro stock is a more sensible buy than SoundHound.
