Why Veritone Stock Plummeted 21% Last Month But Is Climbing In March
Key Points
Veritone's share price sank in February as investors moved out of software and AI stocks.
Macroeconomic jitters also dragged the stock lower.
Veritone's valuation has been rising in March, and the stock could be poised for a big move when the company reports earnings this coming week.
Veritone (NASDAQ: VERI) stock suffered a big sell-off in February. The company's share price fell 21% in a month of trading that saw the S&P 500 index fall by 0.9% and the tech-heavy Nasdaq Composite index sink 3.4%.
Veritone specializes in software tools used to turn unstructured data into actionable insights and saw a big valuation pullback last month as investors broadly reduced exposure to AI stocks and software plays. The company's share price is now down roughly 36% year to date.
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Veritone stock slipped amid pressures for AI stocks
AI software stocks saw a tough month of bearish trading in February as investors digested risks connected to the possibility that new artificial intelligence (AI) tools will disrupt many existing business models. Investors also pivoted out of high-risk, speculative stocks in the month in response to an uncertaint outlook on the macroeconomic front.
Veritone has attracted some attention as a meme stock over the last year, and its growth story seemingly hinges on delivering AI software wins. With the company's valuation gains over the next year connected to its meme-stock status and potential AI-related opportunities, the stage was set for the tech specialist's share price to sink last month as investors pivoted away from those types of stocks.
Veritone has been rising ahead of the company's next quarterly report
Veritone has managed to climb 5.7% in March's trading so far despite volatility for the broader market connected to geopolitical and macroeconomic risk factors. As of this writing, the stock is still donw roughly 36% across 2026's trading despite the pop this month.
On March 3, Veritone published a press release announcing that it had entered into a strategic partnership with LeoSight -- a provider of data-visualization tools for public safety applications. The two companies announced they were launching together to create an integrated solution for law enforcement and public safety organizations.
Veritone followed that news up with a press release on March 5 announcing that it had entered into a new deal with The Washington Post. As part of the multi-year content-licensing agreement, Veritone will represent and market The Washington Post's video content to expand its global reach and monetize the paper's archives.
Veritone is scheduled to report its fourth-quarter report after the market closes on March 12. The company currently has a market capitalization of approximately $274 million and is valued at roughly 2.1 times this year's expected sales.
With its Q3 report, Veritone reported that revenue grew 32% year over year to reach $29.1 million. In the context of that sales growth, the company could look cheaply valued at its current sales multiple. On the other hand, the company's performance has been lumpy in recent years -- and it remains to be seen if its recent level of growth is sustainable.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
