Despite some big valuation swings, SoundHound AI (SOUN 7.00%) stock has delivered huge wins for patient investors. The company went public through a merger with a special purpose acquisition company (SPAC) in April 2022 and got off to a bit of a soggy start following its debut, but shareholders who took a buy-and-hold approach to the conversational artificial intelligence (AI) specialist have been richly rewarded.
In fact, a $10,000 investment made in SoundHound AI stock three years ago would now be worth more than six times that amount.
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SoundHound AI stock is on a massive winning streak
Over the past three years, SoundHound AI stock has delivered a return of 570%. That means that a $10,000 investment made in SoundHound AI stock three years ago would now be worth approximately $66,980 if you had held on to your position. How has the company been able to deliver such incredible returns for shareholders?
NASDAQ: SOUN
Key Data Points
For starters, the business has been serving up very strong sales growth. With the company's last quarterly report, sales reached $42.7 million -- up 217% year over year. Along with the strong sales result, the company also raised its full-year sales guidance to between $160 million and $178 million -- suggesting annual growth of nearly 100% at the midpoint of the guidance range.
Along with very strong sales growth, excitement surrounding long-term opportunities in the AI market has meant that SoundHound has been able to command valuation multiples that bake in a lot of strong future growth. As of this writing, the company is valued at approximately 43.5 times this year's expected sales -- but investors have been willing to pay a premium to own the stock in hopes that its incredible sales growth eventually gives way to very strong earnings.
