Music on the Internet is vigorous but volatile. Stocks of companies providing online music have been on a roller coaster. Enter Sonic Foundry (SFO), which produces PC-based software products--designed to run on Windows and Windows NT operating systems. Its chief product, called ACID, gives a computer the capability of a sound stage, producing sound that will help the users--both amateurs and professionals--to ''create music,'' that could be downloaded on a CD.

''That's the fascination of this company,'' says Will Hickey of Anchor Capital Advisers, which snapped up some 200,000 shares when the company went public on Apr. 22 at 15 a share. The stock has since slumped to just above 7, despite higher-than-expected third-quarter earnings of 3 cents a share, vs. a loss of $1.73 a year earlier. No matter, says Hickey, who believes Sonic Foundry is a play for the long haul in the business of creating multimedia audio formats on the Internet.

Sonic Foundry's ACID software transmits sound to the PC, where users can assemble their own music, explains Hickey. Sound engineers can use it to record music and put it on a CD.