SoundHound AI (NASDAQ:SOUN) Shares Down 3.7% - Should You Sell?

Key Points

• SoundHound AI shares fell 3.7% on the day, even as trading volume jumped sharply above average, reflecting investor caution ahead of upcoming catalysts and ongoing valuation concerns.
• The company announced a partnership with Deliverect to build a fully automated restaurant voice-ordering channel, which could expand its AI reach across drive-thru, phone, kiosk, and in-car ordering in more than 100 languages.
• SoundHound will report second-quarter results on August 5, and investors will be watching revenue growth, margins, and guidance closely after the company recently posted a wider-than-expected loss despite strong year-over-year revenue growth.

SoundHound AI, Inc. (NASDAQ:SOUN - Get Free Report)'s stock price was down 3.7% during trading on Thursday . The stock traded as low as $6.19 and last traded at $6.22. Approximately 49,657,239 shares were traded during trading, an increase of 77% from the average session volume of 28,004,467 shares. The stock had previously closed at $6.46.

Key SoundHound AI News

Here are the key news stories impacting SoundHound AI this week:

• Positive Sentiment: SoundHound AI announced a partnership with Deliverect to create a fully automated restaurant voice-ordering channel, expanding its AI footprint across drive-thru, phone, kiosk, and in-car ordering in more than 100 languages. This could boost future commercial adoption and revenue potential. Deliverect and SoundHound AI Partner to Turn Voice Into a Fully Automated Ordering Channel for Restaurants
• Positive Sentiment: LivePerson sent a letter encouraging stockholders to vote for its pending transaction with SoundHound AI, which suggests progress on a strategic deal that could add scale, a stronger balance sheet, and broader capabilities if completed. LivePerson Sends Letter to Stockholders Highlighting Benefits of Pending Transaction with SoundHound AI
• Positive Sentiment: Analyst-style commentary highlighted SoundHound AI’s restaurant automation opportunity, its OASYS platform, and the pending LivePerson deal as possible long-term growth drivers, reinforcing the stock’s AI narrative. Can SoundHound Disrupt Restaurant Automation in 2026 and Beyond?
• Neutral Sentiment: The company said it will report second-quarter 2026 results on August 5, setting up the next major event that could move the stock depending on revenue growth, margins, and guidance. SoundHound AI To Report 2026 Second Quarter Financial Results, Host Conference Call and Webcast on August 5
• Neutral Sentiment: Market commentary noted the shares may still look expensive even after strong long-term gains, with recent Gartner recognition and the OASYS rollout helping the growth story but not removing valuation concerns. SoundHound AI (SOUN) Stock Could Trade At A Premium Despite Gartner Recognition
• Negative Sentiment: Despite the positive business news, SOUN has recently been trading lower, reflecting investor caution ahead of earnings and ongoing concerns about profitability and valuation. Here's Why SoundHound AI, Inc. (SOUN) Fell More Than Broader Market

Wall Street Analyst Weigh In

Several brokerages recently issued reports on SOUN. LADENBURG THALM/SH SH raised SoundHound AI to a "strong-buy" rating in a report on Wednesday, May 6th. DA Davidson reaffirmed a "buy" rating and issued a $14.00 target price on shares of SoundHound AI in a research report on Wednesday, April 22nd. Finally, Weiss Ratings reiterated a "sell (e+)" rating on shares of SoundHound AI in a research note on Monday, June 15th. One investment analyst has rated the stock with a Strong Buy rating, five have given a Buy rating, three have assigned a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and a consensus price target of $14.93.

SoundHound AI Stock Down 3.7%

The firm has a market capitalization of $2.69 billion, a price-to-earnings ratio of -13.23 and a beta of 2.62. The company has a 50-day moving average price of $7.26 and a 200-day moving average price of $7.98.

SoundHound AI (NASDAQ:SOUN - Get Free Report) last posted its earnings results on Thursday, May 7th. The company reported ($0.06) EPS for the quarter, missing the consensus estimate of ($0.05) by ($0.01). SoundHound AI had a negative net margin of 91.84% and a negative return on equity of 40.15%. The business had revenue of $44.20 million during the quarter, compared to analyst estimates of $42.56 million. During the same quarter in the prior year, the business earned ($0.06) earnings per share. The firm's revenue was up 51.7% compared to the same quarter last year. As a group, analysts forecast that SoundHound AI, Inc. will post -0.45 earnings per share for the current year.

Insiders Place Their Bets

In other SoundHound AI news, SVP Majid Emami sold 28,843 shares of the firm's stock in a transaction dated Monday, June 15th. The shares were sold at an average price of $7.46, for a total transaction of $215,168.78. Following the transaction, the senior vice president owned 472,983 shares of the company's stock, valued at approximately $3,528,453.18. This trade represents a 5.75% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider James Ming Hom sold 28,843 shares of the business's stock in a transaction dated Monday, June 15th. The stock was sold at an average price of $7.46, for a total transaction of $215,168.78. Following the sale, the insider owned 743,521 shares in the company, valued at $5,546,666.66. This trade represents a 3.73% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last ninety days, insiders have sold 268,022 shares of company stock valued at $1,999,444. Corporate insiders own 8.84% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently made changes to their positions in the stock. Morgan Stanley boosted its stake in SoundHound AI by 48.1% during the 4th quarter. Morgan Stanley now owns 8,987,522 shares of the company's stock valued at $89,606,000 after purchasing an additional 2,917,280 shares in the last quarter. UBS Group AG raised its stake in shares of SoundHound AI by 77.6% in the 4th quarter. UBS Group AG now owns 6,124,283 shares of the company's stock worth $61,059,000 after buying an additional 2,676,707 shares in the last quarter. Voloridge Investment Management LLC lifted its holdings in shares of SoundHound AI by 2,259.7% in the fourth quarter. Voloridge Investment Management LLC now owns 2,199,511 shares of the company's stock valued at $21,929,000 after buying an additional 2,106,298 shares during the period. Vanguard Group Inc. lifted its holdings in shares of SoundHound AI by 4.4% in the fourth quarter. Vanguard Group Inc. now owns 45,367,437 shares of the company's stock valued at $452,313,000 after buying an additional 1,909,868 shares during the period. Finally, Jump Financial LLC bought a new position in SoundHound AI during the third quarter valued at about $21,679,000. Institutional investors and hedge funds own 19.28% of the company's stock.

About SoundHound AI

SoundHound AI, Inc is a voice AI and conversational intelligence company specializing in speech recognition, natural language understanding and sound identification technologies. Founded in 2005 and headquartered in Santa Clara, California, the company initially gained recognition with its music discovery app before pivoting to enterprise-grade voice AI solutions. Over the years, SoundHound AI has built a comprehensive platform that enables developers and businesses to embed conversational intelligence into a wide range of products and services.

The company's core offering is the Houndify voice AI platform, which provides customizable speech-to-meaning technology, domain-specific natural language understanding and text-to-speech capabilities.

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