Retail Traders Bet On Further Upside After 6-Session Rally
On Stocktwits, the SoundHound stream saw a 1,844% spike in 24-hour message volume leading up to late Monday.
SoundHound AI, Inc. (SOUN) stock rallied 6.50% with the upside accompanied by almost 1.5 times the average trading volume. The upside emerged amid a lack of company-specific news but may have been driven by the broader market’s strength, with a rally in stocks exposed to artificial intelligence (AI) underpinning sentiment.
Monday’s rally helped SoundHound stock settle at $17.31, the highest level since Jan. 7, although it trades off its all-time high (intraday) of $24.98 reached on Dec. 26, 2024. The stock is on a six-session winning streak, having gained about 23% since Sept. 12.
Oppenheimer analyst Brian Schwartz initiated coverage of SoundHound with a ‘Perform’ rating on Sept. 11, according to the Fly. The analyst said the company has the potential to be a durable growth compounder. While expressing confidence in the company’s technology advantage in the voice artificial intelligence (AI) market, valuation, backlog-to-revenue ratio, and management, the research firm expressed discomfort with newer competition and the pace of penetration.
On Sept. 9, the conversational AI company announced the acquisition of customer service and workflow orchestration company Interactions. Calling it a strategic deal, the company touted two-pronged benefits from the deal:
- Strengthening its agentic AI offerings and accelerating market penetration in customer service across enterprise businesses
- Introducing new brands to its portfolio, such as consumer, tech, device brands, insurers, automakers, and other Fortune 500 companies across industries.
Separately, the company filed a series of 144 reports with the SEC on Monday, disclosing insiders’ plan to sell restricted shares. The company mentioned in the filing that the proposed sale was made to satisfy tax withholding obligations in connection with the vesting of restricted stock units granted between 2022 and 2025.
Amid the recent stock strength, SoundHound stock garnered the attention of retail users of the Stocktwits platform. Retail sentiment toward the stock remained at a ‘bullish’ level, although moving further up in the bullish territory (72/100). The 24-hour message volume change leading up to late Monday was 1,844%.
A bullish user stated that they had purchased additional SoundHound shares, attributing their optimism to the consistent contract flow and the chart pattern. Another user noted a possible cup-and-handle formation — a bullish price pattern signaling a potential buying opportunity — on a yearly chart.
Another user braced for $20+ level for the stock this week.
SoundHound’s stock is down 12.75% this year. The recent gains have pushed the stock into overbought territory (14-day relative strength index at 70.45). The optimism surrounding AI, which has been cushioning the broader market, could lend support to the stock, provided the company continues to secure contract wins. The next major catalyst is the third-quarter earnings report, tentatively due in early November.
Analysts’ average price target for the stock is $15.44, according to Koyfin. This implied nearly 11% downside from Monday’s close.
For updates and corrections, email newsroom[at]stocktwits[dot]com.
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