SoundHound AI (NASDAQ:SOUN) Shares Down 4.6% - Here's Why

Key Points

• SoundHound AI shares fell 4.6% on Tuesday, trading as low as $7.85 after closing at $8.45 the prior day, with volume slightly above average.
• The company’s latest earnings showed revenue growth of 51.7% to $44.2 million, but it still missed EPS estimates and remains unprofitable with negative margins and cash-burn concerns.
• Analyst sentiment is mixed but generally constructive, with a Moderate Buy consensus and a target price of $14.93, even as some firms trimmed targets and insider selling added to investor caution.

SoundHound AI, Inc. (NASDAQ:SOUN - Get Free Report) shares traded down 4.6% on Tuesday . The stock traded as low as $7.85 and last traded at $8.06. 28,333,142 shares traded hands during mid-day trading, an increase of 1% from the average session volume of 27,981,354 shares. The stock had previously closed at $8.45.

SoundHound AI News Summary

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

• Positive Sentiment: Several analysts turned bullish after SoundHound delivered its sixth straight earnings beat, with 24/7 Wall St. saying its model implies significant upside from current levels. We're Bullish on SoundHound With Six Straight Earnings Beats
• Positive Sentiment: SoundHound’s OASYS platform and broader agentic AI strategy are drawing interest because they could help the company scale its voice AI products across more channels and customers. Can SoundHound's OASYS Platform Redefine Agentic AI Worldwide?
• Positive Sentiment: Recent coverage highlights strong revenue growth of about 52% last quarter, which reinforces the company’s growth story and helps explain why investors continue to watch the stock closely. Investors Heavily Search SoundHound AI, Inc. (SOUN): Here is What You Need to Know
• Neutral Sentiment: The stock has been volatile, with some reports noting a sharp recent decline even after a strong monthly rebound, suggesting trading may be driven by fast-moving sentiment rather than fundamentals alone. Assessing SoundHound AI (SOUN) Valuation After A Volatile Share Price Performance
• Negative Sentiment: Despite revenue growth, shares fell after earnings as investors were not satisfied with profitability, and the company remains unprofitable with ongoing cash burn and balance-sheet concerns. SoundHound AI Stock Falls After Earnings: Should You Buy the Dip?
• Negative Sentiment: One report also noted increased short interest activity, which can signal that some traders are betting against the stock or expecting continued volatility. SoundHound AI shares sink 11.5% despite revenue surge

Analyst Upgrades and Downgrades

Several equities research analysts have weighed in on the stock. Piper Sandler restated a "neutral" rating and issued a $9.00 price objective (down from $11.00) on shares of SoundHound AI in a research report on Friday, February 27th. LADENBURG THALM/SH SH upgraded shares of SoundHound AI to a "strong-buy" rating in a research report on Wednesday, May 6th. HC Wainwright lowered their price objective on shares of SoundHound AI from $26.00 to $20.00 and set a "buy" rating for the company in a research report on Monday, March 2nd. DA Davidson reaffirmed a "buy" rating and issued a $14.00 target price on shares of SoundHound AI in a research note on Wednesday, April 22nd. Finally, Zacks Research raised shares of SoundHound AI from a "strong sell" rating to a "hold" rating in a research note on Monday, February 9th. One investment analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating, three have issued a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, SoundHound AI has an average rating of "Moderate Buy" and a consensus target price of $14.93.

SoundHound AI Trading Down 4.6%

The company has a market cap of $3.41 billion, a P/E ratio of -17.15 and a beta of 2.58. The firm's 50 day moving average price is $7.57 and its 200-day moving average price is $10.04.

SoundHound AI (NASDAQ:SOUN - Get Free Report) last issued its earnings results on Thursday, May 7th. The company reported ($0.06) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.05) by ($0.01). The business had revenue of $44.20 million during the quarter, compared to the consensus estimate of $42.56 million. SoundHound AI had a negative net margin of 91.84% and a negative return on equity of 41.46%. The firm's revenue for the quarter was up 51.7% compared to the same quarter last year. During the same period last year, the business posted ($0.06) EPS. Analysts predict that SoundHound AI, Inc. will post -0.34 earnings per share for the current fiscal year.

Insider Buying and Selling at SoundHound AI

In related news, CFO Nitesh Sharan sold 44,027 shares of SoundHound AI stock in a transaction that occurred on Friday, March 20th. The shares were sold at an average price of $6.79, for a total transaction of $298,943.33. Following the transaction, the chief financial officer owned 1,661,121 shares of the company's stock, valued at $11,279,011.59. This trade represents a 2.58% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this link. Also, SVP Majid Emami sold 31,019 shares of the company's stock in a transaction that occurred on Friday, March 20th. The shares were sold at an average price of $6.79, for a total transaction of $210,619.01. Following the completion of the sale, the senior vice president directly owned 501,826 shares of the company's stock, valued at $3,407,398.54. The trade was a 5.82% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 307,973 shares of company stock worth $2,091,110 over the last ninety days. 8.84% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On SoundHound AI

Several hedge funds have recently bought and sold shares of SOUN. Royal Bank of Canada raised its holdings in SoundHound AI by 71.3% in the first quarter. Royal Bank of Canada now owns 160,299 shares of the company's stock worth $1,301,000 after purchasing an additional 66,714 shares during the period. Integrated Wealth Concepts LLC raised its holdings in SoundHound AI by 8.9% in the first quarter. Integrated Wealth Concepts LLC now owns 14,676 shares of the company's stock worth $119,000 after purchasing an additional 1,201 shares during the period. NewEdge Advisors LLC raised its holdings in SoundHound AI by 12.9% in the first quarter. NewEdge Advisors LLC now owns 41,030 shares of the company's stock worth $333,000 after purchasing an additional 4,692 shares during the period. Goldman Sachs Group Inc. raised its holdings in SoundHound AI by 69.8% in the first quarter. Goldman Sachs Group Inc. now owns 2,639,689 shares of the company's stock worth $21,434,000 after purchasing an additional 1,085,473 shares during the period. Finally, UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC raised its holdings in SoundHound AI by 10.1% in the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 692,170 shares of the company's stock worth $5,620,000 after purchasing an additional 63,398 shares during the period. 19.28% of the stock is currently owned by institutional investors and hedge funds.

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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