SoundHound AI Inc (SOUN) shares surged 7.41% in pre-market trading on Monday, extending its remarkable rally this year as analysts grow increasingly bullish on the company's prospects in the booming artificial intelligence (AI) market.

The sharp rise in SOUN's stock price followed Wedbush analyst Daniel Ives significantly raising the firm's price target on the AI company's shares to $22 from $10 previously, while maintaining an Outperform rating. Ives highlighted SoundHound's innovative conversational AI and speech recognition technologies, which position it to capitalize on the massive wave of enterprise AI spending expected over the coming years.

Ives described SoundHound as an "underappreciated pure-play AI company" that is poised to expand its total addressable market and growth trajectory in 2025. The analyst noted that the company is leveraging strategic acquisitions and partnerships, such as its collaboration with Nvidia, to enhance its AI capabilities and prepare for entry into new verticals like e-commerce.