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Shares of SoundHound AI (SOUN) surged around 836% in 2024. The voice artificial intelligence (AI) technology leader benefitted from rising demand for its offerings and significant growth opportunities across key verticals such as automotive, restaurants, and customer service.
While SoundHound stock has gained substantially, at least one Wall Street analyst expects shares to reach $26, the Street-high price target. This represents about 45% upside from its last closing price of $17.98 on Jan. 7. Let’s dive deeper into SOUN stock’s outlook for 2025.
Sustained Momentum in Revenue Growth
SoundHound operates in a $140 billion total addressable market with high barriers to entry, giving it a strong competitive edge. Its diversified customer base is reducing reliance on one-time deals, creating a more predictable and SaaS-like revenue stream.
SoundHound has been growing rapidly. Since 2020, the company’s revenue has increased at a CAGR of 51%. In its most recent quarter, it reported $25.1 million in revenue, representing 89% year-over-year growth. Moreover, its top line surpassed Wall Street estimates of $23 million.
Looking ahead, SoundHound’s growth trajectory appears sustainable as it scales its operations and deepens its presence across multiple high-growth markets. As a leader in enterprise conversational AI, SoundHound is embedding its AI-driven solutions into hundreds of enterprise brands, creating a strong ecosystem of customers and partners. Its diverse portfolio is expanding, and it’s poised to benefit from a broader addressable market driven by the increasing adoption of AI.
Expanding Opportunities in High-Growth Markets
SoundHound operates in markets projected to grow substantially in the coming years, creating a dual growth engine, which includes its own rapid expansion and the explosive growth of its target markets.
The company’s automotive portfolio is thriving, with strong traction in the electric vehicle (EV) sector. In the third quarter of 2024, it secured a significant deal with an up-and-coming EV manufacturer in the Middle East and strengthened its presence in China and India.
Additionally, SoundHound has expanded its AI agent customer service portfolio, making headway into industries like financial services, healthcare, and retail. One of the world’s largest payment card services companies recently extended its contract for another three years, highlighting solid demand for SoundHound’s technology.
SoundHound’s solutions cater to businesses of all sizes, from large enterprises to small and medium-sized businesses (SMBs). For example, its smart answering services have gained traction with SMBs, representing a $30 million market in North America alone.
SoundHound continues to innovate in the restaurant sector with AI-driven solutions for drive-thru operations, phone ordering, and employee assistance. These offerings are expanding into new brands and deepening relationships with existing customers, positioning it well to accelerate revenue growth.
SoundHound’s strategic acquisitions and partnerships are unlocking significant revenue synergies. The company is cross-selling and upselling its products across verticals, further scaling its automotive, AI agent, and restaurant businesses.
Thanks to the ongoing momentum in its business, its cumulative subscriptions and bookings backlog — a key indicator of customer activity — continues to grow. This metric highlights SoundHound’s ability to secure long-term contracts and deepen its relationships with key partners.
While SoundHound is growing rapidly and focusing on capturing growth opportunities, it is also focusing on driving efficiencies and moving towards delivering sustainable earnings.
The Bottom Line on SoundHound AI Stock
SoundHound is expanding its total addressable market through innovation and new product offerings. The company’s ecosystem of customers and partners is growing, and its technology is becoming increasingly integrated into industries worldwide. These factors position SoundHound well for sustained growth in 2025 and beyond.
With its growing scale, innovation, and solid growth opportunities, SoundHound could hit the $26 Street-high price target in 2025.
However, analysts remain cautiously optimistic given the recent rally in SOUN stock. Wall Street has a “Moderate Buy” consensus rating on SoundHound stock.
