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Why SoundHound AI’s Shares Dipped Today?

Jack KelloggAvatar
Written by Jack Kellogg Reviewed by Ellis Hobbs Fact-checked by Matt Monaco
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SoundHound AI Inc.’s stock is under pressure due to challenging market conditions and competitive pressures in the AI sector, causing concern among investors. On Tuesday, SoundHound AI Inc.’s stocks have been trading down by -4.17 percent.

Major Development: Market Responses

  • Shares fell by 23% after Nvidia decided to sell its stake in SoundHound AI amidst concerns over its financial future.

Candlestick Chart

Live Update At 17:20:30 EST: On Tuesday, March 04, 2025 SoundHound AI Inc. stock [NASDAQ: SOUN] is trending down by -4.17%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

  • Nvidia’s sale of shares in SoundHound AI, along with its divestment from other companies like Serve Robotics, sent ripples through the market.

  • SoundHound AI’s stock tumbled 30% following the news that Nvidia’s exit left a significant gap in its investors’ confidence.

  • Unsurprisingly, pre-market movements showed a sharp decrease in SoundHound AI’s shares when the announcement emerged about Nvidia’s position.

Financial Pulse: Understanding Key Metrics

As millionaire penny stock trader and teacher Tim Sykes, says, “It’s not about how much money you make; it’s about how much money you keep.” Many traders focus on generating huge profits, often neglecting the importance of retaining and managing those earnings. Proper trading strategies emphasize capital preservation and smart financial planning to ensure long-term success. It’s essential for traders to prioritize the retention of their profits to build wealth over time.

Scratching beneath the surface, SoundHound AI’s recent financial report outlines a challenging landscape. Though boasting a gross margin of 60.7%, operating at a hefty loss seems a persistent dilemma. Revenue hitting nearly $45M sounds decent. Still, it doesn’t match the negative figures vexing certain profitability ratios, with a shocking EBIT margin of -162.5%. Furthermore, eye-catching numbers like a cash position of $135.6M and total liabilities at $203.7M indicate looming financial hurdles.

More Breaking News

Key financial measures portray SoundHound grappling with profitability. The company’s total revenue reached about $25M for a quarter. Let’s note this pale next to the expenses exceeding $57M. Funding and cash flow concerns are mirrored by a free cash flow of nearly -$35.5M and over $70M long​-term debt. When broken down, such striking numbers highlight the tough road ahead.

Nvidia’s Exit: Market Impact

The landscape shifted dramatically when Nvidia chose to offload their stake not just in SoundHound AI, but also in other firms. This act seemed part of a broader strategy. The decision left some existing and prospective investors jittery. SoundHound AI’s stock plunge was stark. A once vibrant outlook seemed to murmur with uncertainty following Nvidia’s withdrawal.

Relinquishing its stake in SoundHound was perceived as Nvidia drawing financial boundaries. Interestingly, some analysts nod toward a calculated step hinting technological refocus or perhaps risk management, as Nvidia’s stake in SoundHound seemed substantial.

Stock Volatility: Tracing Back the Waves

Taking a closer peek at stock charts unveils a story of highs and lows. SOUN’s movements across dates saw some dizzying peak and troughs. March 4th’s price settled around $9.72 after some steep descents from previous days where it swiftly shifted amidst a frenetic trading session. Intraday trading showed vibrant fluctuations, hinting daily investors reacted sharply to news.

Closing Rhetoric: Looking Forward

Could SoundHound AI make a rebound? Well, navigating long-term debt, alongside challenging financial metrics requires strategic shifts. Tech companies speculate or thrive on innovation. Amidst uncertainty stirred by Nvidia’s exit, growth potential still exists but carefully rests on sturdy financial architectures and trader confidence.

SoundHound AI sails through the choppy seas of stock trading—some exude hope, awaiting clear skies where trades might ricochet. As millionaire penny stock trader and teacher Tim Sykes, says, “Small gains add up over time; focus on building wealth gradually, not chasing jackpots.” Others cautiously maneuver, weighing their anchors for now, wondering if high tide may come again. Will this storm test its endurance or expose weaknesses? Only time will unravel the narrative.

This content is produced using automated systems designed to deliver timely stock news. All material is reviewed by our editorial team and is provided solely for informational and entertainment purposes. It does not constitute professional investment advice. For additional details, please refer to our [Terms of Service]

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”