SoundHound AI (NASDAQ:SOUN) Shares Down 7.8% - Here's What Happened

Key Points

• SoundHound AI shares fell 7.8% on Friday, trading as low as $8.35 after closing at $9.63 the day before, with unusually heavy volume of 48.7 million shares.
• The decline came despite record Q1 revenue of $44.2 million and a revenue beat, because the company missed earnings estimates and cited higher acquisition-related costs and vendor true-ups that hurt margins.
• Investors are also weighing SoundHound’s expansion plans and long-term growth outlook, including the launch of its OASYS AI platform and management’s 2027 revenue target of at least $350 million to $400 million after the planned LivePerson acquisition.

SoundHound AI, Inc. (NASDAQ:SOUN - Get Free Report) shares traded down 7.8% on Friday . The stock traded as low as $8.35 and last traded at $8.88. 48,716,274 shares were traded during mid-day trading, an increase of 75% from the average session volume of 27,883,531 shares. The stock had previously closed at $9.63.

SoundHound AI News Summary

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

• Positive Sentiment: SoundHound posted record Q1 revenue of $44.2 million, up about 52% year over year, and exceeded revenue expectations, showing continued momentum in its voice AI business. SoundHound AI Reports Record Q1 Revenue of $44.2 Million, Up 52%
• Positive Sentiment: The company launched OASYS, a self-learning AI agent platform, which could expand SoundHound’s product offering and support longer-term growth. SoundHound AI (SOUN) Launches OASYS Self-Learning AI Agent Platform
• Positive Sentiment: SoundHound outlined 2027 revenue expectations of at least $350 million to $400 million after the planned LivePerson acquisition, suggesting management sees meaningful future scale. SoundHound outlines 2027 revenue of at minimum $350M-$400M following planned LivePerson acquisition
• Neutral Sentiment: Analysts remain broadly constructive, with at least one recent upgrade to strong-buy and commentary that the stock could have meaningful upside if execution improves. Wall Street Bulls Look Optimistic About SoundHound AI (SOUN): Should You Buy?
• Negative Sentiment: Despite the revenue beat, SoundHound missed earnings estimates and cited higher acquisition-related costs and vendor true-ups, which pressured margins and weighed on investor sentiment. SOUN Q1 Earnings Miss on Higher Costs, Revenue Beat, Stock Down
• Negative Sentiment: Investors also appear concerned that the planned LivePerson deal and broader acquisition strategy could continue to pressure earnings even as revenue grows. SoundHound's stock falls as acquisitions weigh on earnings results

Analyst Upgrades and Downgrades

Several equities analysts have commented on SOUN shares. 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. Piper Sandler restated a "neutral" rating and set a $9.00 target price (down from $11.00) on shares of SoundHound AI in a research report on Friday, February 27th. LADENBURG THALM/SH SH raised shares of SoundHound AI to a "strong-buy" rating in a report on Wednesday. Weiss Ratings reiterated a "sell (d-)" rating on shares of SoundHound AI in a research report on Friday, January 9th. Finally, Zacks Research raised SoundHound AI from a "strong sell" rating to a "hold" rating in a research note on Monday, February 9th. One analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating, three have assigned a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, SoundHound AI currently has a consensus rating of "Moderate Buy" and an average price target of $14.93.

SoundHound AI Stock Down 7.8%

The company has a market capitalization of $3.75 billion, a PE ratio of -177.56 and a beta of 2.58. The firm's 50 day simple moving average is $7.57 and its 200 day simple moving average is $10.18.

SoundHound AI (NASDAQ:SOUN - Get Free Report) last announced its earnings results on Thursday, February 26th. The company reported ($0.02) earnings per share for the quarter, meeting the consensus estimate of ($0.02). SoundHound AI had a negative net margin of 8.71% and a negative return on equity of 3.63%. The business had revenue of $55.06 million for the quarter, compared to the consensus estimate of $53.88 million. During the same quarter in the prior year, the firm posted ($0.05) earnings per share. The business's revenue for the quarter was up 59.4% on a year-over-year basis. As a group, sell-side analysts predict that SoundHound AI, Inc. will post -0.36 EPS for the current fiscal year.

Insider Buying and Selling

In other news, insider James Ming Hom sold 31,019 shares of the company's stock in a transaction that occurred on Friday, March 20th. The stock was sold at an average price of $6.79, for a total transaction of $210,619.01. Following the transaction, the insider owned 772,364 shares of the company's stock, valued at approximately $5,244,351.56. This represents a 3.86% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. Also, COO Michael Zagorsek sold 52,968 shares of the stock in a transaction that occurred on Friday, March 20th. The stock was sold at an average price of $6.79, for a total value of $359,652.72. Following the completion of the sale, the chief operating officer owned 1,734,491 shares in the company, valued at approximately $11,777,193.89. The trade was a 2.96% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 307,973 shares of company stock worth $2,091,110 over the last three months. 8.84% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On SoundHound AI

A number of large investors have recently bought and sold shares of SOUN. EP Wealth Advisors LLC increased its stake in SoundHound AI by 5.3% in the second quarter. EP Wealth Advisors LLC now owns 14,100 shares of the company's stock worth $151,000 after purchasing an additional 706 shares during the period. Newbridge Financial Services Group Inc. grew its holdings in shares of SoundHound AI by 2.7% in the third quarter. Newbridge Financial Services Group Inc. now owns 31,880 shares of the company's stock worth $513,000 after purchasing an additional 830 shares during the last quarter. Insigneo Advisory Services LLC grew its holdings in shares of SoundHound AI by 7.4% in the third quarter. Insigneo Advisory Services LLC now owns 12,416 shares of the company's stock worth $200,000 after purchasing an additional 858 shares during the last quarter. Clear Creek Financial Management LLC increased its stake in SoundHound AI by 1.6% in the 4th quarter. Clear Creek Financial Management LLC now owns 58,091 shares of the company's stock worth $579,000 after buying an additional 941 shares during the period. Finally, PNC Financial Services Group Inc. increased its stake in SoundHound AI by 15.5% in the 3rd quarter. PNC Financial Services Group Inc. now owns 7,127 shares of the company's stock worth $115,000 after buying an additional 956 shares during the period. Hedge funds and other institutional investors 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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