Shares of SoundHound AI (SOUN 3.63%) bounded higher this morning, soaring as much as 10.3%. As of 11:56 a.m. ET, the stock was still up 7%.
The catalyst that drove the artificial intelligence (AI) specialist higher was the revelation that an existing customer was expanding its relationship after experiencing a dramatic productivity increase.
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The Amelia AI acquisition is paying off
Late last year, SoundHound AI acquired enterprise AI software company Amelia to expand its reach in conversational AI. At the time, the pair cited "a distinct competitive advantage in the burgeoning conversational AI space."
That acquisition is paying off. In a press release that dropped on Wednesday morning, SoundHound announced that insurer Apivia Courtage, a division of privately held AEMA Group, would adopt the Amelia 7 AI agent platform for its contact centers as part of the company's digital transformation.
Citing the duo's existing "successful relationship," which began in 2023, Apivia noted that SoundHound's Amelia platform had already driven a 20% productivity increase at its contact centers. The company also pointed out that SoundHound's AI Agents had "handled thousands of calls" related to medical expense reimbursement and insurance, allowing human agents to focus on higher-level tasks.
This represents a huge vote of confidence for SoundHound's Agent AI system, which could ultimately attract other enterprise users. Investors no doubt viewed this as a positive development. After losing more than 60% of its value to kick off the year, SoundHound has come roaring back, gaining 157% since its bottom in mid-April, though it's still underwater year to date.
The rebound was partially driven by the company's blistering financial results. In the second quarter, SoundHound delivered record revenue of $42.7 million, up 217% year over year. That said, investors shouldn't overlook the fact that its loss per share of $0.19 worsened compared to an $0.11 loss in the prior-year quarter.
There's also SoundHound's valuation to consider, as the stock is selling for 37 times next year's expected sales. That, combined with the company's continuing losses, shows that SoundHound AI stock isn't without risk.
