“Time to get bullish,” investor says of SoundHound AI stock

SoundHound AI (NASDAQ:SOUN)A leading AI technology company focused on voice-activated products and services is facing a simple but important question in the broader AI revolution: Would you trust an AI assistant to take your food order?

Skepticism about AI voice agents replacing human touch is nothing new, but one investor who goes by the pseudonym Deep Value Investing appears to be reconsidering that stance — and may be ready to believe in it.

“The shift towards AI voice agents has gained so much momentum that skeptics like me have no choice but to accept the current reality,” admits the investor.

Deep Value examines how this shift could mean significant growth opportunities for SOUN in the coming years. Central to the investor’s analysis is SOUN’s increasing presence in the food services sector, particularly in the quick service restaurant (QSR) space, where the company has partnered with seven of the world’s top 20 brands, including Chipotle, Five Guys and Panda Express .

“The growth potential in this sector is enormous: analysts expect the food automation market to reach $14 billion in 2024, while the company currently only holds a 0.1% market share,” explains the investor.

Additionally, Deep Value praises SoundHound’s recent success in diversifying into additional customers and industries. The investor expects the company to continue to expand its customer base in financial services, healthcare, insurance and automotive.

This includes a groundbreaking project with industry leader Nvidia that does not require cloud connectivity, Deep Value adds.

In addition to the optimistic assessment, the investor also expresses particular caution regarding SoundHound’s long-term forecast. If AI-driven ordering systems experience embarrassing public failures — the kind that can go viral on social media — quick-service restaurant operators may reconsider their reliance on AI solutions, potentially slowing adoption.

And yet the benefits outweigh the risks for Deep Value, which concludes that there is “asymmetric upside potential for SoundHound.” The investor therefore classifies the SOUN share as a “buy”. (To view Deep Value Investing’s track record, click here)

So this is Deep Value’s view: What does Wall Street have in mind? The current outlook presents a conundrum. On one hand, the stock gets a Moderate Buy consensus rating based on 3 Buys and 2 Holds. However, after such a high rise this year, analysts expect the stock to cool down and expect a downside of 46%. It will be worth watching to see if these analysts update their price targets in the near future. (See SOUN stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is for informational purposes only. It is very important to do your own analysis before investing.