Here's Why I Wouldn't Touch SoundHound AI With a 10-Foot Pole

• SoundHound AI provides voice-driven artificial quality services -- a utile innovation.

• But the banal has been highly volatile arsenic this is fundamentally inactive an emerging technology.

• Without earnings, this high-tech start-up is asking investors to instrumentality a leap of faith.

• 10 stocks we similar amended than SoundHound AI ›

I'm a dividend investor, truthful I could easy conscionable accidental I wouldn't interaction SoundHound AI (NASDAQ: SOUN) with a 10-foot rod due to the fact that it doesn't wage a dividend.

However, there's really much to the communicative than conscionable that elemental fact. Indeed, determination are plentifulness of different reasons wherefore investors should beryllium leery of buying SoundHound AI adjacent though its voice-based artificial quality (AI) services are rather interesting.

Here are a fewer for you to see earlier you get caught up successful the AI golden rush.

Thanks to my dividend focus, I don't ain galore tech stocks. However, I bash ain International Business Machines and Texas Instruments. They some person agelong streaks of yearly dividend increases. And I bought them each portion their dividend yields were historically high.

There's thing other they some have, however, and that's earnings. They are established and important businesses that are highly profitable. SoundHound AI isn't profitable, and there's nary telling erstwhile it volition be, fixed the superior concern arms contention taking signifier successful the artificial quality space.

Emotionally driven investors often instrumentality breathtaking concern themes and tally with them mode excessively far. Artificial quality is apt to alteration the world, but not each AI banal volition beryllium a winner. It is mode excessively soon to cognize which companies volition extremity up being the Googles and which volition extremity up being the Yahoo!s. I'm not consenting to hazard uncovering retired that SoundHound's exertion is outshone by a competitor's offering.

To beryllium fair, SoundHound AI is apt to involvement much assertive investors than me. But it would inactive necessitate a monolithic hazard tolerance to ain this stock. In the past twelvemonth alone, it has mislaid 50% of its worth twice. That's not antithetic for a start-up business, but that's a roller-coaster thrust that astir investors, myself included, astir apt couldn't stomach.

Unless you person a precise beardown content that SoundHound is going to beryllium a semipermanent victor successful the AI space, you should astir apt ticker this banal from the sidelines. Money-losing start-ups that are inactive spending heavy to physique their businesses successful emerging, competitory sectors are not usually the kinds of stocks that astir investors should buy. The volatile banal terms highlights that fact.