/AI%20(artificial%20intelligence)/AI%20technology%20-%20by%20Wanan%20Yossingkum%20via%20iStock.jpg)
When it comes to conversational artificial intelligence (AI), the spotlight typically falls on tech giants like Amazon’s (AMZN) Alexa or Apple’s (AAPL) Siri, which are some dominant players shaping the consumer landscape. But beyond Big Tech’s grip on smart assistants, SoundHound AI (SOUN) has carved out its own path. Instead of battling for a share of the household AI market, SoundHound has been redefining voice technology for enterprises, embedding its AI-driven solutions into industries like automotive, healthcare, and financial services.
In fact, with AI stocks dominating investors’ portfolios, the company made waves last year, delivering massive returns after chip powerhouse Nvidia (NVDA) disclosed an approximately $3.7 million stake in the company through its inaugural 13F filing, reflecting a strong endorsement of its potential. But interestingly, 2025 has been far less kind to SoundHound, with the company seemingly heading in the wrong direction. Macroeconomic uncertainties, an overheated valuation, and Nvidia’s complete divestment of its stake have weighed heavily on SOUN stock, pushing it into negative territory.
Yet, on a positive note, SoundHound’s fundamentals remain impressive. Its latest earnings report showcases strong top-line momentum, driven by expanding enterprise adoption and the rising demand for conversational AI. So, with the stock currently under pressure, could its recent struggles present a compelling buying opportunity for investors now?
About SoundHound Stock
Founded in 2005, California-based SoundHound AI (SOUN) has emerged as a key player in the conversational AI space, providing voice-driven solutions across multiple industries. The company’s proprietary technology powers fast and accurate multilingual interactions, with AI-driven tools like Smart Answering, Smart Ordering, and Dynamic Drive-Thru enhancing customer engagement. Processing billions of interactions annually, SoundHound is at the forefront of voice-enabled technology.
The company’s market cap presently stands at around $4 billion. SoundHound soared 113% over the past six months, vastly outperforming the S&P 500 Index during the same stretch. But the momentum hasn’t carried into 2025. This year has been brutal for SOUN stock, which has plunged almost 50%.
But despite taking a beating this year, SoundHound’s valuation remains anything but cheap. Although its price-sales multiple has certainly cooled from last year’s highs, it still sits at a lofty 41.4x, far exceeding the sector average of just 2.87x.
SoundHound Takes Off After Q4 Earnings
Despite the prevailing negative sentiment surrounding SoundHound, the stock made a splash following its fourth-quarter earnings report on Feb. 27, skyrocketing almost 17.5% in the next trading session. While the company posted a steeper-than-expected loss of $0.69 per share, widening significantly from the prior year’s $0.07 per share loss, investors looked past the red ink, focusing instead on its impressive top-line growth.
For the final quarter of fiscal 2024, SoundHound delivered a staggering 101% year-over-year revenue increase, reaching $34.5 million and slightly exceeding Wall Street’s expectations by 2.5%. Reflecting on the company’s performance, CEO Keyvan Mohajer said, “We had a breakthrough year, expanding our leadership position in voice and conversational AI through major customer wins, expanded partnerships, groundbreaking generative AI innovation, and strategic acquisitions.”
Armed with a robust portfolio of voice-enabled AI solutions, the CEO believes that the company is well-positioned to deliver even greater commercial impact as demand for conversational AI accelerates. Although profitability remains out of reach for now, the company ended the year with a strong liquidity position, holding approximately $198 million in cash and cash equivalents and, notably, zero outstanding debt as of Dec. 31, 2024.
Looking forward to 2025, management has lifted the company’s revenue forecast, projecting it to range between $157 million and $177 million, signaling confidence in its growth trajectory. Analysts tracking SoundHound project the company’s loss to narrow 73.1% year over year in fiscal 2025 and improve another 21.4% in fiscal 2026.
What Do Analysts Expect for SoundHound Stock?
Even though the coverage might be limited, Wall Street seems to think SoundHound is still worth a shot, maintaining a consensus “Moderate Buy” rating overall. Of the six analysts offering recommendations, three are betting big with a “Strong Buy,” while the remaining three are playing it safe with a “Hold.”
The average analyst price target of $14.67 indicates remarkable potential upside of 42% from the current price levels, while the Street-high price target of $26 suggests that SOUN could rally as much as 151% from here.
