Why High-Quality AI Stocks Like SoundHound Dropped After the BTC Cascade and Why the Rebound Should Be Faster

I was away for a while due to travels. Might attend the CES in Vegas. I see a lot of people asked why SOUN fell even though nothing changed in the company’s fundamentals.

Here’s the simple explanation:

1. The BTC crash triggered a global liquidity shock

When Bitcoin has a liquidation cascade:

• Hedge funds
• Shadow banks
• Quants
• High-beta portfolios

all experience a spike in Value-at-Risk (VaR).

When VaR explodes, they cut risk everywhere, not just in crypto.

This means:

High-beta tech stocks (SOUN, PLTR, IONQ, UPST, etc.) get reduced automatically, even if nothing is wrong with the company. We shorted PLTR and MSTR to hedge against the loss.

It’s a mechanical reaction, not a fundamental one. It is an obligation to do so.

1. SoundHound got grouped into the “high-beta bucket”

During liquidity stress, models don’t care about fundamentals. They only see “beta exposure.” That is why even the best news in the world won’t help out.

So SOUN temporarily gets lumped with:

• Growth tech
• AI small/mid caps
• High-volatility names
• Everything that moves more than the market

It’s not about SOUN itself and it’s mostly about risk algorithms. You need to study market behaviors.

1. Fundamentals still matter and SOUN is solid

Unlike crypto ( I have BTC and ETH), SoundHound has:

• Growing revenue
• Major enterprise contracts (Hyundai, Stellantis, restaurants, OEMs)
• Expanding margins
• A real product used at scale
• Sticky customers and recurring demand
• A front-row seat in AI voice automation

None of that changed because BTC had a liquidation event.

1. Shadow banks re-enter high-quality AI earlier than crypto

This is the key difference:

BTC → needs global liquidity to return (Fed pivot, easing, macro shift) and this is happening slowly. BTC will go to a new ATH by mid Jan.

SOUN → rebounds as soon as de-risking stops (because funds look for fundamentals + convex upside). This started to happen this week. Watching it all through next week.

SOUN is a fundamental convexity asset, not a macro hedge. That makes its recovery faster after forced de-risking. That is why I expect a new ATH very very soon.

1. The drop wasn’t a judgment on SOUN.

It was an automated reaction to macro VaR shock.

Once that stabilizes, flows return to companies with:

✔️ Real revenue

✔️ Real contracts

✔️ Real growth curves

✔️ Real AI demand

SOUN fits that perfectly.

🔥 Bottom Line

The BTC liquidation created a short-lived, mechanical drawdown across all high-beta assets including SOUN.

But SoundHound has:

🟧 Strong fundamentals

🟧 Strong tailwinds

🟧 Growing enterprise footprint

🟧 A massive AI voice TAM

🟧 No dependency on crypto liquidity

This is why high-quality AI names tend to rebound faster than BTC after shocks like this.

Enjoy a very wild ride up!

Chill!!!