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SoundHound AI, Inc. Technical Analysis: Mixed Signals Point to Short-Term Volatility

StockInvest.us, 3 weeks ago

StockInvest.us Technical Analysis

SoundHound AI, Inc. (NASDAQ: SOUN) closed on May 23, 2024, at $4.99, reflecting a decrease of 1.58%. The intraday movements saw a low of $4.86 and a high of $5.21, suggesting some volatility within a modest price range. The Relative Strength Index (RSI14) stands at 57, placing the stock in a neutral zone, neither overbought nor oversold.

The 50-day moving average of $5.24 is above the last close price, indicating short-term bearish sentiment, although the price remains significantly above the 200-day moving average of $3.16, highlighting a strong longer-term uptrend. The Moving Average Convergence Divergence (MACD) is positive at 0.44, suggesting bullish momentum over the medium term.

However, the high Average True Range (ATR) of 9.78 hints at potential volatility. Support is noted at $4.96, close to the last closing price, and resistance at $5.75, which could act as a near-term target if the stock gains upward momentum.

Fundamental Analysis

SoundHound AI has a market capitalization of $1.66 billion, positioning it as a small to mid-cap stock with considerable room for growth. The company posted an EPS of -0.38, translating to a negative PE ratio of -13.3, indicative of current unprofitability. Upcoming earnings on August 13, 2024, will be pivotal in showcasing the company’s financial health and future trajectory.

Recent news highlights positive sentiment around AI stocks due to strong results from Nvidia and mentions that specific initiatives like voice-enabled ordering at quick-service restaurants favor SoundHound AI. Institutional interest is piqued, evident from notable buys by influential investors like Seth Klarman. Despite this, inherent risks remain as the entity strives to meet its high valuations, competition in the AI space, and market speculation.

SoundHound AI, Inc. Short-Term Predictions

For the next trading day, May 24, 2024, the stock might experience minor fluctuations between its support at $4.96 and resistance at $5.75. Given the recent negative close, it may initially trade sideways or slightly downward unless buoyed by broader market movements or sector-specific news.

In the upcoming week, the stock might face continued volatility. Positive sentiment from broader AI market movements could lead to testing or surpassing the resistance level of $5.75. However, consistent trading volumes below the average suggest caution.

Intrinsic Value and Long-Term Potential

While the intrinsic value estimation is complex due to current unprofitability, SoundHound AI’s market presence in the growing voice AI sector suggests substantial long-term potential. The median price target of $7.20 set by analysts indicates confidence in future growth. Moreover, strategic investments by significant market players underscore the stock's potential.

Overall Evaluation: Hold

Given its technical indicators suggesting short-term volatility and mixed sentiment, combined with favorable long-term prospects within the AI domain, SoundHound AI, Inc. can be categorized as a 'Hold.' Investors should monitor upcoming earnings closely and be cautious of the inherent risks in the AI sector. Its current trajectory and market interest make it a potential candidate for significant future growth, but short-term volatility warrants a measured approach.

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