SoundHound AI stock plummeted due to high valuation, while DigitalOcean Holdings and Ambarella show growth potential

From Nasdaq: 2025-06-27 17:30:00

Shares of SoundHound AI have plummeted over 52% in 2025 due to the stock’s high valuation at the start of the year following a massive surge in 2024. The stock was trading at a steep 90 times sales at the beginning of 2025, prompting investors to take profits amidst market uncertainties like the trade war and conflicts in the Middle East. DigitalOcean Holdings, with a market cap of $2.54 billion, presents a more reasonable valuation of 3.3 times sales. The company’s growth is driven by the rising demand for AI products, offering powerful graphics cards and AI-related services. Annual recurring revenue from AI services surged 160% in the first quarter. Ambarella, another fast-growing company, benefits from the increasing adoption of AI in sectors like security cameras and IoT devices. The company’s AI chips generated 75% of revenue in the first quarter of fiscal 2026, with a 58% year-over-year revenue increase. Ambarella is poised for sustained growth, with analysts forecasting a 55% stock price increase.



Read more at Nasdaq: Prediction: 2 Stocks That Will Be Worth More Than SoundHound AI 1 Year From Now