eyeQ: high-flying AI stock triggers bearish signal
Experts at eyeQ have used AI and their own smart machine to analyse macro conditions and generate actionable trading signals. Is a 285% one-year gain enough for now?
7th October 2025 11:25
by Huw Roberts from eyeQ
“Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset's value, market conditions, and historical performance.” eyeQ
- Discover: eyeQ analysis explained | eyeQ: our smart machine in action | Glossary
SoundHound
Macro Relevance: 70%
Model Value: $15.04
Fair Value Gap: +17.6% premium to model value
Data correct as at 7 October 2025. Please click glossary for explanation of terms. Long-term strategic model.
SoundHound AI Inc Ordinary Shares - Class A (NASDAQ:SOUN) has been a popular artificial intelligence (AI) play for retail investors over the past 18 months.
It had an amazing 2024, rising over 800%, but endured a brutal pullback early this year as NVIDIA Corp (NASDAQ:NVDA) exited its stake and concerns grew around its financial reporting. However, this latest “melt up” in US equities has seen it cement its place as one of the hot AI stocks.
To be fair, it is one of the few pure AI plays, and its voice recognition and conversational AI applications are used globally by blue-chip firms. Its scope for growth is potentially huge.
Indeed, in many ways SoundHound captures two of the critical questions for investors today:
it still isn’t profitable, so investors are betting on promises of future growth
the charts look strong and momentum continues to point higher. But valuations are already stretched. Momentum versus valuations - which matters more?
eyeQ’s approach is uniquely macro . So, from our side, we’d note:
SoundHound has just come back into a macro regime for the first time since summer 2023. For a long time, the macro view was irrelevant for the stock price but our macro relevance score is now 70%, which suggests stuff such as economic growth, inflation and the Federal Reserve are important
eyeQ model value has stalled over the past few weeks. So, the latest rally has taken the stock 17.6% above macro conditions. That’s enough for a bearish signal.
Investors need to consider all the various moving parts of what’s driving SOUN. Chart momentum is strong and with any AI play, general market vibes are important. Macro is only part of the jigsaw, but its importance is growing and the risk/reward is now tilted towards downside risks.
Source: eyeQ. Past performance is not a guide to future performance.
Useful terminology:
Model value
Where our smart machine calculates that any stock market index, single stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment.
Model (macro) relevance
How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price.
Fair Value Gap (FVG)
The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it's cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.
Long Term model
This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results - model value, model relevance, Fair Value Gap.
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