SoundHound AI (NASDAQ:SOUN) Shares Up 1% - Should You Buy?

Key Points

• SOUN shares rose 1% to $3.91 in Wednesday trading, on volume 27% below the average; the price remained below its 50- and 200-day moving averages.
• Analysts’ consensus rating is Hold, with an average price target of $9.50, though recent target cuts included DA Davidson’s reduction from $10 to $5.
• SoundHound reported quarterly revenue growth of 48.5% year over year and a smaller-than-expected loss per share, but it remains unprofitable; investors are also weighing growth initiatives against concerns about margins, cash burn, and dilution.

SoundHound AI, Inc. (NASDAQ:SOUN - Get Free Report)'s share price traded up 1% during trading on Wednesday. The stock traded as high as $4.02 and last traded at $3.91. Approximately 19,066,462 shares were traded during trading, a decline of 27% from the average daily volume of 26,211,299 shares. The stock had previously closed at $3.87.

Key SoundHound AI News

Investors following SOUN have been watching these news items:

• Positive Sentiment: The company has launched a platform for enterprises to build custom AI agents, raised its 2026 revenue guidance, and issued an optimistic 2027 outlook. These developments may support expectations for future growth. Should You Buy SoundHound AI Stock After Its 83% Plunge? The Answer Might Surprise You.
• Negative Sentiment: Recent selling pressure followed a third-quarter revenue result that fell short of analyst expectations. Commentary also highlights weak sequential revenue growth and lower gross margins, raising concerns about the pace and quality of growth. Why SoundHound AI stock is down today
• Negative Sentiment: Cost-cutting and profitability targets remain forward-looking, while ongoing cash burn, potential dilution, and reliance on acquisitions could weigh on the shares if integration or savings fall short. SoundHound AI: Priced For Collapse Despite Rich Growth Prospects

Wall Street Analysts Forecast Growth

A number of analysts have recently issued reports on the stock. Weiss Ratings raised shares of SoundHound AI from a "sell (e+)" rating to a "sell (d-)" rating in a report on Thursday, October 15th. DA Davidson dropped their target price on shares of SoundHound AI from $10.00 to $5.00 and set a "buy" rating on the stock in a report on Friday, November 6th. Wall Street Zen raised shares of SoundHound AI from a "strong sell" rating to a "sell" rating in a research report on Saturday, October 24th. Oppenheimer reiterated a "market perform" rating on shares of SoundHound AI in a research note on Friday, November 6th. Finally, Piper Sandler lowered their price target on SoundHound AI from $7.00 to $6.00 and set a "neutral" rating on the stock in a report on Tuesday, September 22nd. One equities research analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating, four have assigned a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat.com, SoundHound AI has a consensus rating of "Hold" and an average target price of $9.50.

SoundHound AI Price Performance

The firm's 50-day moving average is $5.37 and its 200-day moving average is $6.96. The company has a market capitalization of $1.74 billion, a P/E ratio of -18.67 and a beta of 2.89.

SoundHound AI (NASDAQ:SOUN - Get Free Report) last released its quarterly earnings results on Thursday, November 5th. The company reported ($0.05) earnings per share for the quarter, topping the consensus estimate of ($0.12) by $0.07. SoundHound AI had a negative net margin of 33.17% and a negative return on equity of 15.72%. The business had revenue of $62.43 million for the quarter, compared to the consensus estimate of $61.71 million. During the same period last year, the firm earned ($0.03) earnings per share. The company's quarterly revenue was up 48.5% on a year-over-year basis. As a group, analysts forecast that SoundHound AI, Inc. will post -0.39 EPS for the current fiscal year.

Insider Buying and Selling

In related news, SVP Majid Emami sold 38,730 shares of the stock in a transaction that occurred on Tuesday, September 15th. The shares were sold at an average price of $6.33, for a total value of $245,160.90. Following the completion of the sale, the senior vice president directly owned 834,253 shares of the company's stock, valued at approximately $5,280,821.49. This represents a 4.44% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider James Hom sold 38,730 shares of the firm's stock in a transaction that occurred on Tuesday, September 15th. The stock was sold at an average price of $6.33, for a total transaction of $245,160.90. Following the sale, the insider owned 1,105,555 shares in the company, valued at approximately $6,998,163.15. The trade was a 3.38% decrease in their position. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 288,758 shares of company stock worth $1,828,598 over the last ninety days. 8.84% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Large investors have recently modified their holdings of the company. California State Teachers Retirement System lifted its position in shares of SoundHound AI by 25.0% in the first quarter. California State Teachers Retirement System now owns 440,023 shares of the company's stock valued at $3,023,000 after acquiring an additional 87,998 shares in the last quarter. Calamos Advisors LLC purchased a new stake in shares of SoundHound AI during the third quarter worth about $4,195,000. Themes Management Co LLC raised its stake in SoundHound AI by 86.5% during the 1st quarter. Themes Management Co LLC now owns 191,444 shares of the company's stock valued at $1,315,000 after purchasing an additional 88,820 shares during the period. Corient Private Wealth LP raised its stake in SoundHound AI by 777.2% during the 2nd quarter. Corient Private Wealth LP now owns 176,764 shares of the company's stock valued at $1,144,000 after purchasing an additional 156,612 shares during the period. Finally, AXQ Capital LP lifted its holdings in SoundHound AI by 395.6% in the 2nd quarter. AXQ Capital LP now owns 254,744 shares of the company's stock worth $1,648,000 after purchasing an additional 203,345 shares in the last quarter. Hedge funds and other institutional investors own 19.28% of the company's stock.

About SoundHound AI

SoundHound AI develops voice and conversational artificial intelligence technology for businesses. Its platform is designed to let people interact with products and services using natural speech, without relying solely on preset commands or menus. The company offers voice assistants and conversational tools for industries including automotive, restaurants, and consumer electronics. Its products include Houndify, a platform for building voice-enabled applications, and SoundHound Chat AI, which combines conversational voice technology with generative AI.

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