The short interest in the outstanding shares of the conversational artificial intelligence solution provider, SoundHound AI Inc. (NASDAQ:SOUN) rose during the latest reporting period, however, the CEO remained confident in the company’s growth prospects, especially after a partnership with technology giant Nvidia Corp. (NASDAQ:NVDA).
What Happened: About 32.89% of SoundHound’s publicly available shares were shorted as of the settlement date on Feb. 28, having an effective date of March 3. Representing an 18.71% increase from the previous settlement date of Feb. 14, the short interest on the stock increased from 100.849 million to 119.717 million shares.
The average daily trading volume during the latest period decreased from 52.260 million to 49.929 million shares. The volume indicated that it would require approximately 2.4 days for the short sellers to cover their positions without significantly impacting the stock price.
The CEO of the company, Keyvan Mohajer, who appeared on CNBC’s ‘Fast Money’ to talk about the company’s latest partnership with Nvidia said that the increasing shorts did not bother him.
“We are in an AI disruption and disruption comes with volatility. We think long-term and I tell my colleagues that shorts don’t change our goal, our goal is to succeed, they only make the price of winning bigger, so bring it,” he said.
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Why It Matters: SoundHound has partnered with Nvidia to enhance AI-powered voice solutions. According to its press release, the partnership will help SoundHound improve real-time RAG, model optimization, and low-latency processing for industries like automotive and restaurants.
“We are handling a lot of traffic in the cloud and now we can deliver more faster and efficient response time to our users,” said Mohajer.
Nvidia NIM and NeMo microservices will also enhance SoundHound’s voice AI platform, reducing latency and improving contextual retrieval, enabling faster and more cost-effective AI deployments.
Talking about the financial impact of the partnership, the CEO added, “It reduces cost because it can be more efficient, it can increase our throughputs, it also should increase our adoption because some customers are very sensitive to latency and ultimately more revenue.”
Price Action: SOUN was down 2.54% in premarket on Thursday, whereas the exchange-traded fund tracking the Nasdaq 100 index, Invesco QQQ Trust, Series 1 (NASDAQ:QQQ) dropped 0.86%.
On a year-to-date basis, SoundHound fell by 51.14% and it was 24.21% higher over a year.
Benzinga’s Edge Rankings show a poor price trend in the short and medium term, but a stronger price trend in the long term for SOUN. While the momentum and fundamental growth ranking were firm, its value ranking was very low.
Its consensus price target was $12.86, with a ';hold’ rating, based on the seven analysts tracked by Benzinga. The price targets ranged from a low of $7 to a high of $26. The three latest ratings from HC Wainwright & Co., DA Davidson, and Northland Capital Markets averaged $15.67, implying a 62.35% upside.
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