TLDR
- SoundHound AI stock jumped over 13% in five trading days and has gained 240% over the past year, reaching $20-21 per share with a market cap topping $8 billion.
- The company reported Q2 revenue of $42.7 million, up 217% year-over-year, and raised its full-year guidance to $160-178 million from last year’s $84.6 million.
- SoundHound acquired Interactions for $60 million in September and holds $230 million in cash with no debt, plus a customer contract backlog exceeding $1.2 billion.
- The company remains unprofitable with a Q2 net loss of $0.19 per share but aims to reach breakeven by late 2025 as scale improves.
- Analysts give the stock a “Moderate Buy” rating with an average price target of $14-15, below the current trading price, with concerns about the rich valuation at 40-50x trailing sales.
SoundHound AI has captured investor attention with a stock price surge of around 240% over the past year. The company’s shares recently reached $20-21 per share, marking their highest levels since early 2025.
Trading volume has exploded alongside the price rally. On October 14 alone, more than 76 million shares changed hands, about 60% above average daily volume.
The stock’s market capitalization now exceeds $8 billion. This valuation stands out for a company that still reports losses each quarter.
The 52-week range tells a story of extreme volatility, with prices swinging from roughly $4.80 to $25. Daily moves of 5-10% or more have become routine for SOUN shares.
Short interest remains elevated at around 30% of the float. This setup has some traders betting against the stock while others pile in, creating conditions for potential short squeeze rallies.
The company’s Q2 2025 earnings report on August 7 lit a fire under the stock. Revenue hit a record $42.7 million, jumping 217% year-over-year and beating analyst forecasts by roughly 30%.
Management raised full-year sales guidance following the strong quarter. The company now projects 2025 revenue between $160 million and $178 million, nearly double 2024’s total revenue.
Recent Deals and Recognition
Late September brought a credibility boost when research firm IDC named SoundHound a leader in conversational AI. New partnership wins followed, including a nationwide Red Lobster rollout for AI phone ordering.
The company’s voice AI technology now powers drive-thru orders and call center queries across restaurants, automakers, and banks. Chains like Chipotle and Applebee’s have already deployed the system.
In the automotive space, SoundHound’s voice assistant is embedded in Hyundai, Kia, and Stellantis vehicles through multi-year partnerships. A new alliance with French insurer Apivia will bring SoundHound’s AI agent to contact centers.
Despite the revenue growth, SoundHound posted a Q2 net loss of $0.19 per share on a GAAP basis. The non-GAAP loss came in smaller at $0.03 per share.
Gross margins stood at 39% on a GAAP basis in Q2, pressured by recent acquisitions. On an adjusted basis, margins reached a healthier 58%.
Company leadership targets breakeven by late 2025. Scale improvements should help as revenue continues growing.
Strong Balance Sheet and Backlog
The firm’s balance sheet shows $230 million in cash as of mid-2025 with no debt. This financial position gives management flexibility to pursue growth opportunities.
SoundHound reports a customer contract backlog topping $1.2 billion, more than seven times its current annual revenue. These multi-year subscription and licensing deals point to strong future demand.
In September, the company spent $60 million in cash to acquire Interactions, a customer-service AI provider. The purchase strengthens SoundHound’s product offerings and is expected to boost operating profitability.
The company’s proprietary voice AI engine and new Polaris speech model claim superior accuracy compared to big-tech rivals. Internal tests show Polaris performing 30-40% better at transcribing speech than OpenAI’s Whisper or Google’s voice AI.
SoundHound’s Amelia 7 assistant, launched in May 2025, integrates large language models like ChatGPT to handle complex tasks end-to-end. The platform can listen, reason, and act through natural, multi-turn conversations.
The stock trades at approximately 40-50 times trailing sales at current prices. This premium valuation typically appears in early-stage cloud software companies with explosive growth.
Wall Street analysts give SOUN a “Moderate Buy” consensus rating. Recent tallies show roughly five Buy ratings, four Holds, and one Sell.
The average 12-month price target sits around $14-15, well below the current trading price. Some firms raised their targets recently, with Ladenburg Thalmann going to $16 and D.A. Davidson to $17.
Oppenheimer initiated coverage at “Perform,” a neutral stance, praising the tech advantages but warning of tough competition ahead. Weiss recently reiterated a Sell rating, while Zacks ranks the stock a Hold.
Company insiders sold about 725,000 shares worth roughly $12.7 million over the last quarter as the stock surged. Only about 19% of shares are held by institutions, with retail traders dominating ownership.
