SoundHound AI, Inc. ( SOUN ) shares are trading lower on Tuesday as the broader tech sector declined. The drop followed economic data, rising treasury yields, and NVIDIA Corp ( NVDA )‘s announcements at CES 2025.

What To Know: At CES, NVIDIA ( NVDA ) unveiled its Cosmos foundation models, which generate synthetic data to train robots and autonomous vehicles, new RTX 50 series gaming chips, and its first desktop computer for AI development. While these announcements highlight advancements in AI and robotics, analysts potentially remain skeptical about their immediate commercial viability. NVIDIA's ( NVDA ) stock dropped over 4%, reflecting investor concerns about the scalability of emerging technologies, which may have impacted sentiment across the sector, including for SoundHound AI ( SOUN ).

The labor market data also added further pressure, with job openings exceeding expectations at 8.1 million in November. Strong hiring pushed Treasury yields higher, with the 30-year yield reaching 4.90%, increasing costs for tech firms reliant on borrowing for growth. Rising yields and NVIDIA’s mixed reception at CES have created a challenging environment for AI companies like SoundHound to maintain investor confidence.

Why It Matters: SoundHound's drop may reflect broader sector challenges, including competition from larger players like NVIDIA ( NVDA ) and economic conditions making it harder for growth-oriented companies to attract investor support. With increasing scrutiny regarding the profitability of AI technologies, the sector remains under pressure.

SOUN Price Action: Soundhound shares were down 9.02% at $18.10 at the time of writing, according to Benzinga Pro.

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