AI SoundHound (NASDAQ:SON) The stock posts explosive gains in Friday trading. The conversational artificial intelligence (AI) The company’s stock price was up 24.5% as of 3:15 p.m. ET.
SoundHound AI stock is rising today after the company was named a leader in Frost & Sullivan’s 2024 Frost Radar report. Specifically, the company’s Amelia platform was named a leader in conversational AI for enterprise healthcare.
Frost & Sullivan released its Frost Radar 2024 report yesterday, and SoundHound AI’s stock price is huge. bullish momentum thanks to the positive coverage of the company’s Amelia platform in the report. Frost & Sullivan forecasts that the healthcare conversational AI market is expected to reach $2.34 billion in annual sales by the end of 2027. The company’s report suggests that this segment of the market will see a compound annual growth (CAGR) of 17.2% through the end of this forecast period.
Nitin Manocha, senior industry analyst at Frost & Sullivan, said SoundHound’s Amelia platform stands out for its performance and innovation pipeline. The company acquired Amelia in September for $80 million, and Manocha believes that integrating SoundHound’s voice AI capabilities into Amelia’s enterprise platform opens the door to huge growth opportunities.
Until now, SoundHound AI’s main sources of business have been in categories such as restaurants and automotive. Relatedly, the company announced Dec. 11 that it would bring its AI ordering and customer service software to Church’s Texas Chicken restaurants. Last week, the conversational AI specialist announced it would bring its software to Torchy’s Tacos.
Frost & Sullivan’s positive coverage of SoundHound AI’s position in the enterprise healthcare market highlights a major new growth opportunity for the company. The company is still in the very early stages of tapping into the category’s growth potential, and it has the potential to quickly become a major performance driver.
Recent contract wins and coverage of emerging opportunities have helped fuel an incredible bull run for the company. Its stock price is now up 703% in this year’s trading, and the company is undeniably seeing encouraging adoption momentum.
On the other hand, the stock’s strong gains mean the company is now valued at around 75 times expected sales for this year. With a valuation so heavily dependent on growth, investors need to understand that SoundHound AI stock’s explosive potential also comes with a high level of risk.