SoundHound AI (NASDAQ: SOUN) stock is surging in Thursday’s trading. The conversational artificial intelligence (AI) company’s share price was up 30.1% as of 1 p.m. ET. As of this writing, the S&P 500 index was flat, and the Nasdaq Composite index was up 0.2%.
SoundHound AI’s valuation is surging today following news that the company’s AI ordering and customer service technologies are being rolled out at Torchy’s Tacos. The stock is now up 157% over the last month.
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SoundHound published a press release today announcing that its AI Smart Ordering service had gone live at Torchy’s Tacos. The service has been adopted at all 130 of the company’s restaurant locations. SoundHound’s conversational AI software has been trained on the Torchy’s menu and has the capacity to manage 100% of the restaurant’s incoming calls and handle questions about menu items, specials, store hours, and allergen information. In turn, the utilization of the AI software will allow Torchy’s staff to focus on food preparation and providing in-store service.
While today’s explosive gains for SoundHound AI stock were spurred by the announcement of the rollout of services at Torchy’s Tacos, there’s a foundational element that could be playing an even greater role in the share price gains. SoundHound AI has gained favor as a meme stock, and its share price has frequently seen big shifts on little or no relevant news.
Landing a new contract at Torchy’s is certainly a bullish development, and increasing adoption highlights the value and potential of SoundHound’s software. On the other hand, bridging its conversational AI ordering software to 130 new restaurant locations is not the kind of announcement that would normally be expected to power such explosive share price gains. While the stock could continue rocketing higher on meme-powered momentum, the recent gains raise some significant valuation concerns — and there’s a good chance the stock will be highly volatile in the near term.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why SoundHound AI Stock Is Skyrocketing Today was originally published by The Motley Fool
Source: finance.yahoo.com