SoundHound AI (Nasdaq: SOUN) The company's shares have surged this week, closing up 48% from last Friday's closing price, according to data from S&P Global Market Intelligence.
Automobile manufacturers Stellantis The company this week expanded integration of its SoundHound voice-based artificial intelligence technology in Europe, a development that could drive big sales for the voice-interface software specialist and has investors flocking to the company's shares in response.
SoundHound's European expansion accelerates
With an update released this week, Stellantis has made its SoundHound voice-based operating system available to compatible Peugeot, Opel and Vauxhall vehicles, with the brand's new cars expected to include the technology in future. The software, which incorporates OpenAI's ChatGPT chatbot, has been released for the brands in Germany, France, the UK, Italy and seven other European markets.
By the end of July, SoundHound integration will be rolled out in Peugeot, Opel and Vauxhall vehicles across a total of 17 European markets. This expanded debut follows the production integration of Stellantis' high-performance DS Automobiles brand in March.
In addition to those divisions, the auto conglomerate also includes Chrysler, Dodge, Fiat and Jeep, so it's possible that other Stellantis-owned automakers could adopt SoundHound's technology in the not-too-distant future.
What does the future hold for SoundHound AI stock?
This week's explosive rise has pushed SoundHound's market cap back above the $2 billion mark, while the company's shares are still down about 30.5% from their 52-week high hit earlier this year.
SoundHound's stock price has been extremely volatile due to the growing excitement around AI and uncertainty about the company's long-term sales outlook. After surging about 192% in 2024 trading, SoundHound is now trading at about 29 times this year's expected sales.
In its most recent quarterly report, SoundHound saw revenue grow 73% year over year. While the business is showing impressive momentum, revenue for the period was still relatively small, at $11.6 million. The software specialist also reported a net loss of $33 million for the quarter.
While the company appears to be gaining and expanding key partnerships, it remains to be seen whether the company can defend itself and stave off competitive pressures. Given SoundHound AI's valuation profile and speculative outlook, the company's stock price is likely to remain highly volatile in the near term.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.
Why SoundHound AI Stock Soared This Week originally appeared on The Motley Fool
