Why SoundHound AI Inc. (SOUN) Crashed On Wednesday?

We recently published a list of AI Stocks Dominate Wednesday’s 10 Worst Performers. In this article, we are going to take a look at where SoundHound AI Inc. (NASDAQ:SOUN) stands against other AI stocks that dominate Wednesday’s worst performers.

Wall Street’s major indices ended in the negative territory on Wednesday as investors parked funds to minimize risks from the resumption of trade war among the world’s largest economies, with a fresh round of tariffs scheduled to be implemented next week.

The tech-heavy Nasdaq fell the hardest, down 2.04 percent, followed by the S&P 500, down 1.12 percent. The Dow Jones declined by 0.31 percent.

According to President Donald Trump, all vehicles made outside of the US would be slapped with a 25-percent tariff.

The broader market downturn spilled over into 10 companies—predominantly AI stocks—further dampened by a cautious outlook on the industry. In this article, we listed Wednesday’s 10 worst performers and detailed the reasons behind their drop.

To come up with the list, we considered only the stocks with $2 billion market capitalization and $5 million in trading volume.

A software engineer focused on a computer screen, writing code to create a conversational assistant.

SoundHound AI Inc. (NASDAQ:SOUN)

Shares of SoundHound AI fell for a second day on Wednesday, losing 8.04 percent to finish at $9.38 apiece as investors continued to sell off positions following bearish outlooks from experts.

In his recent episode of Mad Money, host Jim Cramer suggested selling SOUN, saying that it was a “meme stock.”

“I think it’s a meme stock and I’m just going to call them as meme stocks from now on because, look, you can’t really value it… I can’t help you with something like SoundHound, because it’s a meme stock. It’s going to go wherever the meme people want it to go and good luck with them,” he said.

Meanwhile, sentiment was further dampened by a top Alibaba (NYSE:BABA) executive’s comments that the AI industry has become a bubble.

“I’m still astounded by the type of numbers that are being thrown around in the U.S. about investing into AI,” said BABA Chairman Joe Tsai.

“I think in a way, people are investing ahead of the demand that they’re seeing today, but they are projecting much bigger demand,” he said.

Overall, SOUN ranks 10th on our list of AI stocks that dominate Wednesday’s worst performers. While we acknowledge the potential of SOUN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as SOUN but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.