SoundHound AI Stock Continues To Consolidate – Holds $5 Level

SoundHound AI (NASDAQ: SOUN), a company specialising in voice-enabled artificial intelligence and conversational intelligence technologies, is positioning itself as a key player in the market with strong growth potential over the coming years.

The SoundHound stock price has taken holders on quite the rollercoaster this year, with gains of 141% only telling a small part of the story. SOUN has gone from the mid $1 range all the way through to breaking $10, hitting a high of $10.25 before pulling back for a significant period of consolidation.

Taking a look at the 6 month chart below, the pullback is clear to see, as is the support that has been found more recently around the $4 mark. With the stock not hitting higher highs, or lower lows during this period, the consolidation phase seems to be continuing, but new levels may be getting set to be tested as support, potentially setting up SOUN for the next leg up, if fundamentals can support.

The conviction in SoundHound AI's promising future is bolstered by its significant backlog of long-term contracts and unfilled orders, showcasing steadfast customer commitment and a reliable revenue stream.

At the core of SoundHound AI's growth potential lies its extensive backlog of contracts, which has demonstrated remarkable growth in recent times. The company reported a substantial backlog worth $723 million in the second quarter, experiencing a substantial increase from $682 million in the preceding quarter and more than doubling from $339 million in the same period the previous year. This escalation represents an impressive year-over-year growth rate of 113%. The growth in the backlog is a clear indicator of the company's momentum in securing new contracts while also collecting recurring subscription fees from existing ones.

SoundHound AI's revenue is heavily reliant on its voice control technology sales, with a particular focus on the automotive and restaurant industries. The company's technology is integrated into various renowned brands and franchises, including Fiat, Chrysler, Maserati, and Stellantis. These partnerships not only reflect the company's strong market position but also its potential for scaling and deepening its market penetration.

Furthermore, SoundHound AI is actively expanding its business by strategically acquiring companies within the AI space. These acquisitions are aimed at enhancing its core offerings in voice controls and integrating e-commerce solutions. Such strategic moves are anticipated to consolidate its presence in core industries while paving the way for expansion into new market sectors, signaling a robust growth trajectory.

SoundHound AI's notable backlog of long-term contracts, growing at an accelerated rate, presents a compelling case for the company's ability to outperform the market. With solid partnerships in key industries and strategic moves to acquire companies that bolster its offerings, SoundHound AI appears well-positioned for continued growth. SoundHound AI’s prospects remain favourable, drawing attention from investors and analysts alike, who see value in the company's scalable technology and strategic market approach.