The increase in SoundHound AI's stock price by 18.7% over the past week.
SoundHound AI's shares saw an impressive 18.7% surge this week, as per S&P Global Market Intelligence data, sparked by two major events. Firstly, the company announced its partnership with Rekor Systems to integrate voice commands and data sharing into emergency vehicles, enhancing emergency service operations with hands-free controls for ALPR systems, radios, and more.
Secondly, President Trump reversed an executive order by his predecessor, Biden, which required AI companies to undergo safety tests and share results with the U.S. government. This move has been interpreted as a step towards reduced AI regulations, a development which has boosted SoundHound's stock price.
SoundHound AI and Emergency Vehicles
SoundHound, a prominent voice-activated AI player, is teaming up with Rekor Systems to upgrade emergency vehicles. This collaboration will introduce SoundHound's advanced conversational AI features into police cars, eventually expanding to fire trucks and ambulances. Officers will be able to operate vehicle systems like ALPR, radios, and other controls via voice commands, thus improving operational efficiency and safety.
SoundHound's automotive customers, including Honda, Stellantis, and Hyundai, accounted for 90% of its revenue in 2023. Since then, the company has expanded its revenue streams into various sectors such as restaurants, financial services, healthcare, and insurance. Following the Rekor partnership, SoundHound continues to lead in in-vehicle voice technology, underscoring its versatility as a technological provider.
AI Regulatory Environment
Biden's 2023 executive order stipulated that AI developers should conduct safety tests and share specifics about their technologies with the government. However, Trump's revoked order marked a shift towards less stringent AI regulations. This regulatory easing has rekindled investor interest in AI companies, with SoundHound's stock benefiting from the policy change.
Assessing SoundHound AI
Although SoundHound has enjoyed a staggering 777% price surge over the previous 12 months, its $15.43 share price results in a hefty price-to-sales ratio of 74. This has raised concerns about its valuation, which is considered "Significantly Overvalued" by GF Value. Despit(sic) these valuation issues, the company's strong balance sheet and projected revenue growth indicate enduring potential, making cautious investment consideration prudent.
In light of Trump's reversal of the executive order on AI regulations, investors have shown increased interest in AI companies, leading to a boost in SoundHound's stock price. Leveraging its partnership with Rekor Systems, SoundHound is expanding its influence in the automotive sector, particularly in emergency vehicles, by integrating its advanced conversational AI features for enhanced operational efficiency and safety.
