One of the lesser-known companies that’s garnering interest among growth investors today is SoundHound AI (NASDAQ:SOUN). Indeed, a 30% move in a given stock will do that. Currently, SOUN stock has given up some of this morning’s rally, trading approximately 20% higher at the time of writing.
It’s not really rocket science to see what’s behind the impressive move we’re seeing in SOUN stock today. The company’s focus on voice artificial intelligence is what investors are focusing on. With surges in other AI-related stocks, Buzzfeed (NASDAQ:BZFD), and various ChatGPT headlines coming to mind, any company with an AI focus appears to be on the buy lists of momentum traders right now.
That said, SoundHound is also a company with its own set of catalysts. The company pre-announced its 2022 results this week, reporting revenues at the high end of its previous guidance. Additionally, the company announced the closing of an additional $25 million of preferred equity financing. SoundHound expects that this financing will help bolster its balance sheet, as the company looks to reduce debt as it cuts costs to the tune of $60 million per year.
Let’s dive into what investors may want to make of this move.
SOUN Stock Soars as AI Companies See Surge in Interest
In addition to bolstered demand for AI stocks, companies in this sector are also benefiting from geopolitical tailwinds in this space. A joint U.S.-EU artificial intelligence collaboration was announced today by national security advisor Jake Sullivan. This partnership is intended on driving “responsible advancements in AI to address major global challenges with a joint development model.” Thus, as if the AI space needed another catalyst, there’s another reason for insteps to get bullish today.
SoundHound is certainly an intriguing AI play in the burgeoning AI sector. Focused on voice-related projects, SoundHound could continue to see strong interest, as investors look to add and diversify exposure in this sector. The company’s strong revenue growth and equity issuance could further this investment thesis, with SoundHound’s next-generation conversational AI products set to make waves in this space moving forward.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.