Why SoundHound AI Stock Plummeted Last Week

Core Viewpoint - SoundHound AI stock experienced a significant decline of 19.4% over the past week, influenced by bearish pressures in the tech sector and concerns regarding AI valuations [1][2]. Group 1: Stock Performance - SoundHound AI's share price fell 19.4% from the previous week's market close, while the S&P 500 rose 0.3% and the Nasdaq Composite fell approximately 0.6% during the same period [1]. - Despite the recent pullback, SoundHound AI's stock is still up about 31.5% over the past three months [2]. Group 2: Research and Valuation Concerns - A new report from MIT indicated that 95% of businesses studied have not seen significant bottom-line improvements from their investments in generative AI, leading to valuation pullbacks for many AI stocks, including SoundHound AI [4]. - The bearish sentiment in the AI sector was exacerbated by macroeconomic indicators suggesting a challenging environment for growth stocks [2]. Group 3: Macroeconomic Influences - The Bureau of Labor Statistics reported higher-than-expected inflation levels in its Producer Price Index for July, raising concerns about inflation impacting the consumer sector [5]. - Federal Reserve Chair Jerome Powell's speech suggested that slowing growth in the U.S. economy may take precedence over inflationary pressures in shaping interest rate policy, which could positively affect SoundHound AI's stock if rates are cut [6].