SoundHound AI (NASDAQ:SOUN) has moved higher in recent days, breaking a string of losses that has brought the stock down by over 45 percent in the last three months. The business, a leader in voice AI technology that has focused heavily on restaurant deployments and integration in the automotive industry, has a compelling long-term growth story that hasn’t been matched by its stock’s performance over the last year. Why did SoundHound AI stock go up, and could now be the time to buy SOUN for a chance to take advantage of a recovery?
Why Is SoundHound Rising?
The recent bump in SoundHound prices can largely be attributed to the new technologies it presented at the CES 2026 show in Las Vegas. At the show, SoundHound highlighted its growing agentic AI capabilities, including cutting-edge AI vision technology that allows devices to more easily interact with their physical environments. Agentic AI is increasingly catching attention from investors, many of whom see the new branch of artificial intelligence as the key to delivering the efficiency and productivity gains that have been somewhat elusive for earlier forms of the technology.
SoundHound has also made additional headway in the automotive space through a newly announced partnership with mapping and location technology firm TomTom. Under this partnership, SoundHound will integrate its automotive AI with TomTom’s navigation technology, giving drivers the benefits of agentic AI. With this technology, consumers will have greater hands-free capabilities and be able to assign relatively complex tasks to their vehicles’ AI. As an example, SoundHound’s latest automotive AI can make restaurant reservations for drivers upon voice command.
Between the expansion of its automotive footprint and the technological capabilities showcased at CES, SoundHound enjoyed a significant bump in investor and analyst interest. The market will also be closely watching the Q4 earnings report, which is set to be released in late February.
SoundHound Revenues of $42M
Although the stock hasn’t delivered positive returns over the last 12 months, SoundHound has maintained a blistering rate of top-line growth. In Q3, for example, SoundHound generated $42.0 million in revenues, a 68 percent improvement on the year-ago period. This marked the 13th consecutive quarter of positive revenue growth at SoundHound, and the ongoing growth has been strong enough to bring it from just $31 million of full-year revenues in 2021 to an expected range of $165-$180 million for the full year of 2025.
While SoundHound is heavily prioritizing revenue growth, the business has also made at least some progress in the direction of profitability. Although Q3 showed a GAAP net loss of $109.3 million, the vast majority of this stemmed from non-cash losses on contingent acquisition liabilities. The adjusted net income, which excluded this impact, showed a much more modest loss of $13.0 million.
Late in the third quarter, SoundHound also announced a new partnership with Red Lobster, adding to its already large portfolio of restaurant brands that leverage its technology. SoundHound AI also appears in such chains as Five Guys, Chipotle and Firehouse Subs.
Soundhound Down Over Past 12 Months
Even with the recent price spike, SoundHound is still down nearly 12 percent over the last 12 months. The stock has also moved well below the analyst consensus price target of $16.31, which implies an upside of 44.6 percent from the most recent price of $11.28. Indeed, even the lowest target price for SOUN is $11, only 2.5 percent below where the stock is already trading. As far as analysts are concerned, SoundHound seems to carry an asymmetrical risk profile with significant upside and limited downside.
Although analysts are still bullish, it’s difficult to say that SoundHound is exactly cheap at its current price. Shares of SOUN are trading at almost 30 times trailing 12-month sales, even though the business hasn’t yet achieved profitability. Even with SoundHound performing quite well, this price premium requires it to keep generating rapid revenue growth for the foreseeable future.
Is SoundHound a Buy Now?
When it comes to growth potential, there’s not much doubt that SoundHound has the ability to keep expanding its revenues at impressive rates. In addition to its strong presence in AI for restaurants and growing automotive business, SoundHound is being deployed in healthcare, finance, insurance and other industries looking to leverage its leading voice AI technology. SoundHound is also in a strong position to prioritize its rapid revenue growth over immediate profitability, owing to its cash stockpile of $269 million with no long-term debt on its books.
Even with such strong revenue potential, though, it’s hard to ignore the drag that has been exerted on SoundHound by its high valuation. Despite top-line growth rates exceeding 40 percent, the market has sold off SOUN because even higher growth had already been priced in. At one point in late 2024, shares of SOUN were trading for over 100 times trailing sales. While the current P/S ratio is certainly more reasonable, history has shown that the high expectations investors place on SOUN can work against it even as the business delivers remarkably positive growth.
It’s also important to take into account the exposure SOUN could have to an AI selloff. With high expectations of future earnings priced in and its entire business revolving around AI technology, SoundHound would likely be a significant loser if the market soured on the promise of AI. Considering the bumps many AI stocks hit late last year and the sluggish start they’ve had in 2026, SoundHound could be at risk of dropping as a result of cooling investor sentiment.
Ultimately, SoundHound appears to be a rather expensive but also rather promising play on the future of voice AI technology. There’s little doubt that the business is positioning itself as a leader in this space, and its growing footprint in everything from restaurant ordering systems to agentic AI for vehicles suggests that its long-term addressable market could be massive. Though the stock carries a fairly high degree of risk, investors who are bullish on AI and highly risk-tolerant may find it a compelling buy while share prices remain somewhat depressed.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.