SoundHound AI, Inc. (NASDAQ: SOUN) Analysis: Potential Hold Amidst Market Volatility

Technical Analysis

SoundHound AI, Inc. (NASDAQ: SOUN) closed at $4.09 on June 18, 2024, reflecting a market decrease of 4.66% from the previous trading day. The stock reached an intraday low of $4.05 and a high of $4.235. The Year High stands at $10.25, while the Year Low is $1.49, indicating significant volatility within the 52-week range.

The current RSI14 is 34, which is approaching the oversold territory (below 30 typically indicates oversold conditions). The stock is close to its immediate support level of $4.06, and technically facing resistance at $4.77. The 50-Day Moving Average of $4.654 is above the last close, suggesting a short-term bearish trend. However, the 200-Day Moving Average of $3.36 remains below the current price, indicating long-term bullish potential.

The MACD (3-month) is -0.150292, further indicating bearish momentum in the short term. The Average True Range (ATR) at 7.35 suggests high volatility.

Fundamental Analysis

SoundHound AI’s market capitalization stands at $1.35 billion, which positions it as a small-cap entity within the tech sector. The current EPS is -$0.38, leading to a negative PE ratio of -10.76. These figures reflect that the company is not profitable currently and is likely investing heavily in growth and development, which is common in early-stage tech firms.

The consensus analyst target median price is $7.20 with a range from $4.90 to $9.50, indicating a substantial upside relative to the last close of $4.09. The stock has garnered attention, with 4 analysts rating it a 'buy' and 1 rating it a 'hold'.

Recent news points to mixed sentiments. The stock price has significantly dropped from a high of over $10, driven by broader market dynamics, including the contrasting performance with stocks like Nvidia. Despite this, the stock remains a focal point for some investors due to its potential within the AI sector.

Short-Term Prediction

For the next trading day, June 20, 2024, SOUN’s price movement may likely test the $4.06 support level given the bearish sentiment and recent price decline. If this support holds, the stock could rebound mildly towards the $4.20 to $4.30 range. However, breaking below $4.06 could trigger further drops towards the year low.

For the upcoming week, a recovery towards the 50-Day Moving Average ($4.654) may occur if the stock finds support and investors react positively to upcoming market cues. However, sustaining above this level may require positive catalysts or news.

Intrinsic Value and Long-Term Investment Potential

From an intrinsic value perspective, the current negative EPS reflects the company’s stage of heavy investment without immediate profitability. Nevertheless, the long-term potential rests on its AI innovations and market expansion capabilities within the voice recognition space. Investors focusing on future growth rather than current profitability might find intrinsic value in the company's expansion and technological advancements.

Overall Evaluation

Given the technical and fundamental analysis, SoundHound AI, Inc. (SOUN) appears to be a 'Hold' candidate. The significant drop from its year high, coupled with current technical weakness and negative earnings, suggests caution. However, the long-term potential within the high-growth AI sector keeps the stock attractive for investors willing to endure short-term volatility for prospective longer-term gains. The upcoming earnings announcement on August 13, 2024, could act as a critical inflection point.