SoundHound AI in Focus as Nvidia’s GPU Tech Conference Kicks Off—Key Level to Watch

SoundHound AI (SOUN) remains in the spotlight Monday after shares in the company gained 52% last week ahead of an eagerly awaited conference hosted this week by investor darling Nvidia (NVDA), which disclosed last month it had a stake in the artificial intelligence (AI) speech recognition software maker.

Shares of SoundHound have more than tripled since a Feb. 14 regulatory filing showed that Nvidia had 1.73 million SoundHound shares valued at roughly $3.67 million as of the end of 2023. Although the transaction only represents 0.63% of SoundHound’s outstanding stock, it’s a significant vote of confidence in its suite of AI products and future growth potential.

SoundHound, which offers its AI voice solutions to the auto industry, restaurants, call centers, and various other end markets, isn’t on the agenda to present at Nvidia’s annual GPU Technology Conference. But the company’s recent explosive stock performance and growing influence in the AI sound niche will keep it in the spotlight.

Investors should be mindful of the potential for extreme price fluctuations leading into the conference. The stock has jumped more than fourfold since the start of the year and currently has 18.39% of its float tied up in short positions, raising the likelihood of near-term volatility. It’s also worth remembering that while the company reported an 80% jump in fourth quarter revenue from the prior year, it’s still posting losses as it works toward commercializing its products.

After going public in April 2022, SoundHound AI shares trended sharply lower until the end of that year before tracking mostly sideways throughout 2023. Sentiment turned bullish in February this year, with the price climbing above key resistance around the $5 level and the 50-day moving average crossing back above the 200-day moving average to generate a golden cross buy signal. 

In a win for the bulls, the stock has retested and successfully held this prior resistance area. Looking ahead, keep an eye on the all-time high (ATH) set in May 2022 at $18.14 as a potential region where the shares could face their next major test if they continue to trend higher.

SoundHound shares were up 1.2% at $9.02 in premarket trading at around 7:05 a.m. ET Monday.

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As of the date this article was written, the author does not own any of the above securities.