Top 2 Tech Stocks That May Plunge This Month

As of July 9, 2025, Zepp Health Corp (ZEPP) and SoundHound AI Inc (SOUN) in the IT sector are highlighted as potentially overbought, signaling a warning for momentum-driven investors. Zepp Health, despite reporting a wider Q1 2025 adjusted loss of $1.13/share, saw its stock jump 112% over the past month, closing Tuesday up 47.1% with an RSI of 88.9. SoundHound AI, gaining 27% in the last month and closing Tuesday up 11.7% following an Overweight initiation by Piper Sandler, also exhibits an RSI of 73.6, both significantly above the 70-point overbought threshold.

Analysis

As of July 9, 2025, technical indicators for Zepp Health (ZEPP) and SoundHound AI (SOUN) signal a potential for short-term price reversals, warranting caution for momentum-focused investors. Zepp Health exhibits a deeply overbought RSI of 88.9, driven by a staggering 112% stock increase over the past month and a 47.1% gain on Tuesday alone. This dramatic price appreciation contrasts sharply with its fundamental performance, where the company reported a widened Q1 adjusted loss of $1.13 per share, down from a loss of $0.76 in the prior-year period. While management cited positive factors like 10% revenue growth in its Amazfit brand and supply chain de-risking, the divergence between the extreme rally and weakening profitability is a significant red flag. Similarly, SoundHound AI shows an overbought RSI of 73.6 following a 27% monthly gain. This move was catalyzed by a Piper Sandler 'Overweight' rating initiation on May 27, but with the stock now at $12.71, it has surpassed the analyst's $12 price target, suggesting the initial positive sentiment may be fully priced in.

Key Decisions for Investors

• Given the overbought RSI signals for both ZEPP (88.9) and SOUN (73.6), investors holding these stocks should consider trimming positions to lock in profits or implementing tight stop-loss orders to mitigate downside risk from a potential pullback.
• For Zepp Health, the disconnect between its extreme price momentum and deteriorating Q1 earnings suggests a high-risk scenario; any shift in market sentiment could trigger a sharp correction, making new long positions at these levels speculative.
• Since SoundHound AI is now trading above its recent $12 price target from Piper Sandler, the catalyst for its latest rally may be exhausted, and it would be prudent for prospective investors to await a consolidation or a new fundamental driver before initiating a position.