TLDR
- SOUN stock hit an 8-month high at $17.31 on Monday, gaining 6.5% with 1.5x average trading volume
- The stock has surged 43% in the past month and 68% over six months on its winning streak
- SoundHound acquired Interactions for $60 million to strengthen its AI-powered customer service offerings
- Analysts maintain moderate buy rating but warn the stock trades at 26x projected 2026 revenue
- Wall Street price target of $15.33 suggests potential 11% downside from current levels
SoundHound AI stock climbed to its highest level since January, closing Monday at $17.31. The voice AI company has been on fire lately, with shares jumping 23% over just six trading sessions.
The latest rally brought no company-specific news. Instead, the broader tech sector surge lifted AI-related stocks across the board.
Nvidia’s partnership announcement with OpenAI to expand data centers helped boost sentiment. This rising tide lifted many AI boats, including SoundHound.
Trading volume spiked to nearly 1.5 times the daily average. Retail traders on Stocktwits showed renewed interest, with message volume jumping 1,844% in 24 hours.
Strategic Acquisition Fuels Growth
Earlier this month, SoundHound completed its biggest move of the year. The company acquired Interactions for $60 million in cash.
Interactions specializes in AI-powered customer service and workflow orchestration. The deal instantly expands SoundHound’s enterprise customer base.
The acquisition strengthens SoundHound’s position in what analysts call “Agentic AI.” This technology helps businesses automate customer interactions more effectively.
Management expects the deal to boost profitability immediately. Additional payments may follow if Interactions hits specific revenue milestones.
The combined company now serves major brands across multiple industries. These include consumer tech, insurance, automotive, and other Fortune 500 companies.
Analyst Views Split on Valuation
Wall Street remains cautiously optimistic about SoundHound’s prospects. Five analysts rate the stock a buy, while two maintain hold ratings.
D.A. Davidson’s Gil Luria raised his price target from $15 to $17. He believes the Interactions deal positions SoundHound as a leader in AI voice assistants.
H.C. Wainwright’s Scott Buck reaffirmed his buy rating. He points to the company’s subscription backlog exceeding $1 billion as justification for the premium valuation.
However, some analysts express concern about the stock’s current levels. Oppenheimer’s Brian Schwartz initiated coverage with a hold rating.
Schwartz worries about new competitors entering the voice AI space. He also questions whether SoundHound can expand fast enough to meet investor expectations.
Rich Valuation Raises Questions
The stock currently trades at 26 times projected 2026 revenue. This premium valuation reflects high growth expectations from investors.
SoundHound’s subscription and booking backlog provides some comfort. The $1 billion figure demonstrates strong customer demand for voice AI solutions.
Yet analysts warn that competition is heating up. New players continue entering the voice AI market with competing technologies.
The pace of market penetration becomes critical. SoundHound needs to capture market share quickly to justify its current valuation multiple.
Some retail traders see bullish technical patterns forming. Chart watchers point to a possible cup-and-handle formation on the yearly chart.
The consensus price target sits at $15.33, implying 11% downside from current levels. This suggests the recent rally may have pushed shares ahead of fundamentals.
Company insiders filed Form 144 reports on Monday, indicating plans to sell restricted shares. These sales relate to tax obligations from vesting stock grants between 2022 and 2025.
