Sienna Rhodes
SoundHound AI (NASDAQ: SOUN) has been making headlines with its recent stock surge, leaving many investors wondering if it's a good buy. The company's share price saw a significant boost, outperforming the S&P 500 and Nasdaq Composite despite their retreat. This rally can be attributed to SoundHound AI's impressive quarterly report, strong sales momentum, and bullish analyst coverage. However, it's important to note that the stock still faces challenges, with a year-to-date decline of about 20%. While investment firms like Ladenburg have upgraded their rating to buy, citing long-term growth prospects, others remain cautious due to the stock's high-risk nature and relatively low margins for a software services company. As investors consider SoundHound AI, they should examine its valuation profile, revenue projections, and analyst recommendations to make informed decisions.
| Characteristics | Values |
|---|---|
| Stock Symbol | SOUN |
| Current Price | $13.55 |
| One-year price target | $16 |
| One-year price target range | $8.08 to $18.90 |
| Zacks Rank | #1 or #2 |
| Zacks Score | A or B |
| Risk | High |
| Recommendation | Hold |
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What You'll Learn
SoundHound AI's stock gains
SoundHound AI (NASDAQ: SOUN) is a leading voice artificial intelligence (AI) company based in Santa Clara, California. The company's products include the Houndify platform, which offers a suite of tools to help brands build conversational voice assistants, as well as SoundHound Chat AI and SoundHound Smart Answering.
SoundHound AI's stock has seen significant gains recently, with a 26.40% increase on August 8, 2025, rising from $10.72 to $13.55. The stock experienced a fluctuation of 11.74% on the same day, with a low of $12.75 and a high of $14.25. In the past two weeks leading up to August 8, the stock had risen by 15.71%.
Following SoundHound AI's quarterly report in early August 2025, investment firm Ladenburg raised its rating on the stock from neutral to buy and increased its one-year price target from $9 per share to $16 per share. Ladenburg cited strong contract momentum and long-term growth opportunities in the conversational AI space as reasons for the upgrade.
Despite the recent gains and bullish outlook, some analysts consider SoundHound AI stock a risky investment at its current valuation. The company is valued at approximately 38 times its expected sales for the year, with margins that are relatively low for a software services company. This valuation profile indicates a high level of downside risk.
However, there are also arguments in favour of investing in SoundHound AI stock. The company has been posting strong sales momentum, with revenue increasing 217% year-over-year to $42.7 million in the last quarter. Additionally, the stock holds buy signals from both short and long-term moving averages, indicating a positive forecast.
In summary, while SoundHound AI's stock has experienced notable gains and has positive growth prospects, it may be a risky investment due to its high valuation multiples and relatively low margins. Investors considering purchasing SoundHound AI stock should carefully evaluate the risks and rewards before making a decision.
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Investment risks
SoundHound AI's valuation profile indicates a high level of downside risk. The company is valued at approximately 38 times this year's expected sales, and its margins are relatively low for a software services company. This makes the stock a risky investment at current levels.
SoundHound AI stock has a high level of daily movement, which also gives it a high risk. The stock has a sell signal from the three-month Moving Average Convergence Divergence (MACD). There is a natural risk when a stock is testing a support level, as if this is broken, the stock may fall to the next support level.
The stock's price target is the price at which analysts consider it fairly valued with respect to its projected earnings and historical earnings. Analysts typically set price targets that correspond to their buy or sell recommendations. SoundHound AI's price target is $16 per share, which leaves very little potential upside in relation to the current price.
Investors should be careful before investing in a company that is growing revenue but showing declining earnings or is unprofitable. SoundHound AI's forecasted annual earnings in 2026-12-31 are -0.70 per share.
SoundHound AI's recent upgrade from a neutral to a buy rating is based on strong contract momentum and long-term growth opportunities in the conversational AI space. However, the stock is still down roughly 20% across this year's trading.
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Analyst ratings
- Buy/Overweight/Outperform: Any of these ratings conveys an analyst’s belief that the stock is likely to outperform a market index (e.g. the S&P 500).
- Hold/Equal-Weight/Market Perform: Any of these ratings conveys an analyst’s belief that the stock is likely to perform in line with a market index.
- Sell/Underweight/Underperform: Any of these ratings suggest that an analyst believes the stock is likely to underperform a market index.
When an analyst upgrades a stock, they are indicating that the company’s fundamentals are being undervalued by investors. Investors can give more weight to the consensus opinion when more analysts cover the stock.
Zacks gives SoundHound AI (SOUN) a Rank of #1 or #2, categorised as a Strong Buy or Buy, with a Score of an A or a B. The Value Scorecard identifies stocks most likely to outperform based on its valuation metrics. The Growth Scorecard evaluates sales and earnings growth, and the Momentum Scorecard focuses on price and earnings momentum.
StockInvest.us does not consider SoundHound AI a buy candidate as of 8 August 2025, but does give it a positive signal. The site gives a recommended stop-loss of $13.04 (-3.76%). For 11 August 2025, the site expects SoundHound AI to open at $13.52, and during the day to move between $13.06 and $14.04.
Ladenburg upgraded its rating of SoundHound AI stock from neutral to buy on 11 August 2025, and raised its one-year price target from $9 per share to $16 per share. The investment firm cited strong contract momentum and long-term growth opportunities in the conversational AI space as reasons for its bullish pivot.
SoundHound AI's valuation profile means that the stock comes with a high level of downside risk, but the possibility that the company is still in the early stages of a much bigger long-term growth story suggests the stock could be a worthwhile portfolio addition for AI-focused investors with high risk tolerance.
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Revenue projections
SoundHound AI (NASDAQ: SOUN) is a global leader in voice artificial intelligence. The company's revenue rose 217% year-over-year to $42.7 million in the last quarter, beating expectations. This growth was driven by strong enterprise momentum and deeper penetration across verticals like restaurants, financial services, and healthcare.
SoundHound AI's automotive business is a key driver of its impressive revenue growth, with new global partnerships and a proprietary tech edge fueling optimism. The company's Voice AI platform, which includes the Amelia 7.0 agentic platform, is gaining traction in enterprise sectors such as healthcare, telecom, energy, and financial services.
In the first quarter of 2025, SoundHound reported 151% YoY revenue growth, with revenues of $29.1 million. The company reaffirmed its full-year 2025 revenue guidance of $157 to $177 million, with FY25 revenue projected at $159.6 million. SoundHound's management expects the first half of 2025 revenue mix to be approximately 40% of the full-year total, indicating projected second-quarter revenues of $33 to $42 million.
Despite SoundHound's impressive revenue growth and strong momentum, some analysts remain cautious about the stock. The company's share price has seen a massive rally recently, but it is still down roughly 20% across this year's trading. At its current valuation, the stock is considered risky, with relatively low margins for a software services company.
Overall, SoundHound AI's revenue projections show strong growth and upside potential, but investors should carefully consider the risks and the company's ability to continue its momentum before making a decision.
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Buy signals
SoundHound AI's stock value has been on a tear recently, with the company posting very strong sales momentum. Its revenue rose 217% year-over-year to $42.7 million last quarter. Following SoundHound AI's quarterly report, Ladenburg raised its rating on the stock from neutral to buy and increased its one-year price target from $9 per share to $16 per share. This was due to strong contract momentum and long-term growth opportunities in the conversational AI space.
SoundHound AI's valuation profile means that the stock comes with a high level of downside risk. However, the possibility that the company is still in the early stages of a much bigger long-term growth story suggests the stock could be a worthwhile portfolio addition for AI-focused investors with high-risk tolerance.
On August 1, 2025, a buy signal was issued from a pivot bottom point, and the stock has since risen 34.03%. Volume is rising along with the price, which is considered a good technical signal. SoundHound AI holds several positive signals, but some sources still don't find these to be enough to consider it a buy candidate.
Zacks gives SoundHound AI a Strong Buy rating, which means it has a Zacks Rank of #1 or #2 and a Score of an A or a B. The Value Scorecard identifies stocks most likely to outperform based on valuation metrics, while the Growth Scorecard evaluates sales and earnings growth. The Momentum Scorecard indicates when the timing is right to enter a stock, measuring price performance and earnings momentum.
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Frequently asked questions
SoundHound AI stock has been upgraded from a sell to a hold candidate. It has been on a winning streak, with a recent 17.3% increase in share price. The investment firm Ladenburg has upgraded its rating from neutral to buy, raising its one-year price target from $9 per share to $16 per share. However, the stock is still down roughly 20% across this year's trading, and it is considered a risky investment at current levels.
As of 11 August 2025, SoundHound AI stock closed at $15.90 per share.
The average one-year price target for SoundHound AI stock is $12.05. Forecasts range from a low of $8.08 to a high of $18.90.
Analyst ratings are classifications that give investors an idea of analyst sentiment about the performance of a stock. The standard analyst ratings are Buy/Overweight/Outperform, Hold/Equal-Weight/Market Perform, and Sell/Underweight/Underperform.
