SoundHound AI Inc (SOUN), a prominent player in the artificial intelligence (AI) solutions market, experienced a significant plummet of 5.4% in its stock price during the intraday trading session on Tuesday.
The decline comes amidst growing concerns about the company's inflated valuation. Despite SoundHound AI's impressive 936% stock surge in 2024, fueled by favorable developments such as outstanding growth, an investment from AI giant Nvidia, and positive analyst coverage, the stock's price-to-sales ratio has skyrocketed to an eye-watering 109 times, substantially higher than AI heavyweight Nvidia's ratio of 31.
As investors grapple with the overvaluation risks, some experts suggest exploring alternative AI stocks like Advanced Micro Devices (AMD). AMD, while underperforming the market in the past year, is poised for a potential turnaround in 2025. With a focus on AI chip production and a growing presence in the AI accelerator and AI PC markets, AMD's revenue and earnings growth are projected to accelerate significantly in the coming year.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.