SOUN’s AI-Driven Rally Faces Earnings Test This Week - How Are Investors Positioning Their Trades?

• SOUN is up 62% from its 52-week low in late March.
• Stocktwits sentiment for the stock is ‘extremely bullish’ and the majority of the analysts rate it a ‘Buy.’
• SoundHound is scheduled to report its first-quarter results on Thursday.

SoundHound AI, Inc. stock rose 17% last week and is now 62% higher than its 52-week low in late March, signaling a bullish setup as the voice AI company heads into its earnings report later this week.

With its stock under $10 and market capitalization just over $4 billion, SoundHound AI has gained traction with retail investors as a lower-priced AI play with rapid revenue growth, offering high-upside exposure to the AI theme after bigger names became crowded trades.

More specifically, a series of recent catalysts appear to be driving momentum recently. SoundHound is acquiring commerce AI firm LivePerson, which not only adds a new business line but would also allow SoundHound to sell its AI technology to LivePerson’s enterprise customers.

LivePerson sells an enterprise conversational AI platform; its customer base is concentrated among major enterprises.

Last week, Vanguard Capital Management disclosed in a filing that it owned 20.35 million SOUN shares or about 5.21% stake in the company and expansion of its contract with retailer and pizza chain Casey’s. Ownership by prominent investors, such as Vanguard in this case, is a positive signal for the company and its shares.

Retail View On SOUN Ticks Upwards 

SOUN ticker garnered buzz on Stoctwits on Sunday, with retail sentiment shifting to ‘extremely bullish’ from ‘bullish’ the previous day, as traders took note of the signals ahead of the start of a fresh trading week. 

“$SOUN going to be a fun week. Unless you’re short,” said a trader. Another wrote: “Vanguard loaded more shares wens/thursday, now owning almost 12% of the float with over 46 mill shares!! They know whats coming!! Smart money loading ahead of thursdays earrings!”

“$SOUN If you're looking for a stock that has the potential to be a millionaire maker, you're likely going to have to find a smaller company with strong technology and a big opportunity. One company that fits that bill is SoundHound AI,” said another trader.

SOUN Earnings On The Deck

SoundHound AI will report its quarterly earnings on April 7. Wall Street expects the company to report a loss of $0.01 per share for the first quarter, narrowing from a loss of $0.09 per share during the same period a year ago, according to Fiscal.ai data.

Analysts expect the company to report a 40% year-on-year revenue surge to $42.56 million during the first quarter.

SoundHound AI has a mixed record with Wall Street estimates. While its earnings have beaten estimates in two of the previous four quarters, its revenue has surpassed expectations in three of the past four quarters.

Currently, six of 8 analysts have a ‘Buy’ rating on the stock, while the remaining two rate it ‘Hold,’ per Koyfin data. Their average price target of $14.63, implying a 53% upside from the stock’s last close.

Despite the recent gains, SoundHound AI’s shares are still 4% down year to date.

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