Why SoundHound Stock Plummeted Today

Stock Performance - SoundHound AI (SOUN) stock tumbled 11 2% as of 4 30 p m ET on Monday with an intraday low of 12 9% earlier in the day [1] - The stock has declined nearly 30% since its presentation at CES 2025 in early January [1] Market Context - The S&P 500 and Nasdaq composite lost 1 5% and 3 1% respectively on the same day [1] - SoundHound's stock decline was exacerbated by broader market concerns related to the entry of DeepSeek a disruptive Chinese AI company [1][3] CES 2025 Performance - SoundHound's presentation at CES 2025 was highly anticipated but failed to impress investors [2] - The demo of its in-car voice "commerce" platform was criticized for providing marginal value while increasing costs and power consumption [2] - This underwhelming performance contributed to the stock's struggles post-event [2] Impact of DeepSeek - DeepSeek a new Chinese AI entrant has caused alarm in the market due to its competitive AI model which rivals those of OpenAI and Amazon [3] - Despite lacking the hardware and funding of its U S counterparts DeepSeek's innovation has raised concerns about weakening demand for U S hardware and potential technological leapfrogging [3] - This news led to a sharp decline in SoundHound and other AI stocks [3]