Why Artificial Intelligence Stocks SoundHound AI, IonQ, and C3.ai Are Struggling Today

Group 1: Market Overview - Technology and AI stocks faced significant declines due to reports of new export controls and signs of a weakening consumer market, with the Nasdaq Composite falling nearly 1.1% [1] - The Conference Board reported a drop in Consumer Confidence in February, falling 7 points to 98.3, marking the lowest level since June 2024 and the largest monthly decline since August 2021 [4] Group 2: Regulatory Environment - The Trump administration is reportedly planning to expand chip controls aimed primarily at China, following similar measures proposed by former President Biden [2] - Discussions have taken place between U.S. officials and counterparts in Japan and the Netherlands regarding restrictions on companies like Tokyo Electron and ASML Holding from storing chip-making equipment in China [3] Group 3: Company-Specific News - Cantor Fitzgerald analyst Thomas Blakey initiated coverage on SoundHound with a neutral rating and a price target of $10, noting the company's strong Voice AI technology but expressing concerns over high valuations [5] - IonQ is nearing the completion of a $250 million acquisition of ID Quantique, a company specializing in network encryption for quantum computers [6] - C3.ai is expected to report earnings soon, but there is no specific news impacting the company directly [6] Group 4: Industry Sentiment - AI stocks are experiencing pressure from various factors, including potential chip controls, upcoming earnings from Nvidia, and the emergence of new competitors like DeepSeek, alongside high valuations and weakening consumer sentiment [7] - Despite the potential of companies like SoundHound, IonQ, and C3.ai, they are trading at multibillion-dollar market caps without profitability, making them vulnerable to market turbulence [8]