SoundHound AI (SOUN) Stock: Why This 230% Winner Might Be Running Out of Steam

TLDR

Table of Contents

SoundHound AI stock has rallied 230% over the past 12 months and 95% in the past six months
Q2 revenue more than tripled year-over-year to $71.8 million in the first half of 2025
Technical indicators show a Strong Buy signal with Moving Average and ROC metrics trending positive
Stock trades at 29 times next year’s sales while adjusted EBITDA remains negative $36.5 million
Wall Street analysts have a Moderate Buy rating with an average price target suggesting 13.61% downside

SoundHound AI stock has become one of the more interesting AI plays in the market. The voice recognition company has delivered serious gains for investors willing to ride the volatility.

The numbers tell a compelling growth story. Revenue jumped 187% year-over-year in the first half of 2025 to $71.8 million. That’s a huge acceleration from the 85% growth rate seen in 2024.

The company generates most of its revenue through Houndify. This platform lets businesses build their own voice recognition tools without sharing data with tech giants like Microsoft or Alphabet.

Recent acquisitions have expanded SoundHound’s reach into new markets. The company bought SYNQ3, Allset, Amelia, and Interactions over the past two years. These deals target the restaurant, customer service, and conversational AI sectors.

The agentic AI market is expected to grow at a 43.8% compound annual rate from 2025 to 2034. SoundHound’s AI-powered chatbots could replace human workers in restaurants, retail, and customer service.

Technical Picture Looks Strong

Technical indicators paint a bullish picture for SOUN stock. The Moving Average Convergence Divergence signals a Buy. The stock’s 50-day Exponential Moving Average sits at $14.1 while the current price is $17.79.

The Rate of Change indicator shows a reading of 10.77, which signals a Buy. Williams %R suggests the stock isn’t overbought and has room to run higher.

The stock’s 20-day EMA also signals an uptrend. These technical factors suggest momentum remains on the bulls’ side.

Valuation Concerns Emerge

The rally has pushed the stock into expensive territory. SoundHound trades at 29 times next year’s sales with an enterprise value of $6.2 billion.

The company raised its full-year revenue guidance to 89% to 110% growth. But this outlook came before the September 9 announcement of the Interactions acquisition.

Margins have compressed as the company has grown. Adjusted gross margin dropped from 76.2% in 2023 to 55.3% in the first half of 2025. Rising cloud expenses and customer onboarding costs have squeezed profitability.

The company remains deeply unprofitable. Adjusted EBITDA came in at negative $36.5 million in the first half of 2025. That’s after posting negative $61.9 million for full year 2024.

Wall Street Weighs In

Analysts expect revenue to grow at a 47% compound annual rate from 2024 to 2027. The consensus view is that adjusted EBITDA will turn positive by 2027.

Five analysts rate the stock a Buy while three rate it a Hold. The average price target of $15.43 implies 13.61% downside from current levels.

Nvidia liquidated its stake in SoundHound earlier this year. Company insiders have been net sellers over the past 12 months. The share count has more than doubled since the SPAC debut in April 2020 through secondary offerings and stock-based compensation.

SoundHound’s customer list includes Stellantis, Chipotle, and Mastercard. The company aims to turn profitable by the end of 2025 while expanding into healthcare and fast food sectors.

The Interactions acquisition is expected to be immediately accretive to operating profits. Management hasn’t disclosed how much this deal will boost full-year revenue.

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