Key Highlights

  • SoundHound AI finished Friday's regular session around $5.84, near its 52-week low of $5.65, then dropped further after hours, removing roughly $160 million from its Market Value with no specific trigger identified.
  • The weakness stood out on a day when technology stocks broadly rallied and the Nasdaq-100 set a record close, leaving SoundHound among the names that missed the rally.
  • Piper Sandler cut its price target on SoundHound to $6 from $7 on September 22, and with shares now trading below $6, the stock is hovering near that lower target.
  • SoundHound's Acquisition of customer-engagement software company LivePerson has closed, with investors watching how the combined Business performs in coming quarters.

SoundHound AI (NASDAQ:SOUN) drifted lower during Friday's tech rally and fell further after the close, edging closer to its lowest level of the past year. Shares slid on Friday, October 2, finishing the regular session around $5.84, near its 52-week low of $5.65. The voice-AI company then dropped further in after-hours trading, removing roughly $160 million from the company's market value. No specific trigger for the after-hours move was identified. The weakness stood out on a day when technology stocks broadly rallied and the Nasdaq-100 set a record close.

A Stock Under Pressure

SoundHound develops voice-recognition and conversational AI technology. Its software powers voice assistants in cars, restaurant ordering systems and customer-service tools. The company has a market value of roughly $2.5 billion.

The stock has been struggling. On September 22, Piper Sandler cut its price target on SoundHound to $6 from $7. With the shares now trading below $6, the stock is hovering near that lower target.

SoundHound has also been expanding through acquisitions. Its purchase of LivePerson, a customer-engagement software company, has closed. Investors will watch how the combined business performs in coming quarters, and the company's next results should offer the first detailed look.

Missing Out on the Tech Rally

Friday was a strong day for most of tech. A weak September jobs report showed just 29,000 jobs added, far below forecasts near 84,000. That caused odds of another Federal Reserve rate hike in October to collapse, giving Growth Stocks a boost.

Chipmakers led. Nvidia hit a record high during the session after Morgan Stanley named it a top semiconductor pick. Teradyne was the top S&P 500 gainer, and Arm Holdings was one of the best performers in the Nasdaq-100.

But the rally was narrow. Most S&P 500 stocks still trade below their 50-day moving averages. SoundHound was among the tech names that lagged, alongside storage stocks Seagate and Western Digital and consulting firm Accenture.

The Broader Market

The Nasdaq Composite rose 319.27 points to 27,190.86, touching an intraday all-time high but stopping short of a record close. The Nasdaq-100 closed at a record 30,807.93, and the S&P 500 gained 56.27 points. Ten of the eleven S&P 500 sectors rose, with consumer discretionary and information technology leading, while health care was the only decliner.

The Fed raised rates on September 16 for the first time since 2023, as an oil shock tied to the war with Iran pushed Inflation higher again. Treasury yields fell right after Friday's jobs report but then reversed to close higher, with the 10-year near its highest level since 2002.

Higher long-term yields tend to weigh on companies whose valuations depend heavily on future growth, a group that includes many AI software names.

Watching Whether the 52-Week Low Holds

The first thing to watch is whether SoundHound holds above its 52-week low of $5.65 or breaks below it when trading resumes after the after-hours drop. Updates on the LivePerson integration and the company's next quarterly results will be key for sentiment. Any further analyst target changes could also move the stock. On the macro side, the Fed's October 27 to 28 meeting and the path of Treasury yields will matter for AI software stocks.