SoundHound AI, Inc. (NASDAQ: SOUN) Technical Analysis: Potential Short-Term Rebound amid Bearish Trend

StockInvest.us, 2 weeks ago

StockInvest.us Technical Analysis:

SoundHound AI, Inc. (NASDAQ: SOUN) closed at $3.89 on July 01, 2024, experiencing a -1.52% decline from the previous close. The stock traded within a range of $3.82 to $3.9998 on the day. The one-year high stands at $10.25, and the one-year low at $1.49, reflecting high volatility in its trading range.

Key technical indicators:

- RSI14 is at an extremely oversold level of 7, suggesting potential for a short-term bounce. - Current price is below both the 50-day ($4.60) and 200-day ($3.42) moving averages, indicating bearish sentiment. - MACD (3-month) at -0.33 further signals bearish momentum.

Based on these metrics, a bounce back above the immediate support at $3.83 towards resistance at $4.17 could be anticipated in the short term. However, the general trend remains bearish.

Fundamental Analysis:

SoundHound AI, Inc. has a market capitalization of $1.28 billion. The company posted an EPS of -$0.38, resulting in a negative P/E ratio of -10.24. The next earnings announcement is on August 13, 2024.

SoundHound AI, Inc. Recent partnerships and investments, notably with Nvidia, signal potential growth avenues. However, high trading volumes compared to its average (9.41 million vs. 24.54 million) and notable media attention suggest speculative interest.

Intrinsic Value and Long-term Investment Potential:

Analyst targets indicate a median price of $7.20, significantly above the current price, reflecting optimism about future growth potential. Long-term partnerships and collaborations, particularly with AI giants like Nvidia, lend credibility to these projections. The company focuses on lucrative industries, e.g., restaurant AI solutions, which could translate into increased revenue streams.

However, sustained financial instability (negative EPS and P/E) introduces risks. The intrinsic value appears higher than the current valuation, but the underlying fundamental weaknesses need addressing for realizing this potential.

Predictions:

- Next Trading Day (July 02, 2024): Given the RSI in oversold territory and near support, a minor uptick towards $3.95 to $4.17 could be plausible, assuming no adverse market influences. - Upcoming Week: Potential stabilization above $3.83 is expected. If positive sentiment around AI persists and volume remains high, approaching $4.50 is feasible.

Overall Evaluation:

The stock should be categorized as a 'Hold'. While short-term technical indicators suggest potential for a brief rally, fundamental concerns and overall bearish sentiment caution against aggressive buying. Longer-term prospects hinge on the company’s ability to convert strategic partnerships into consistent financial performance. Thus, current investors may wait for more clarity on earnings and developments.

Check full SoundHound AI, Inc. forecast and analysis here.