SoundHound AI (NASDAQ:SOUN) Stock Price Down 5.6% - Should You Sell?

Key Points

• SoundHound announced a definitive agreement to acquire LivePerson and raised FY‑2027 revenue guidance to $350–$400M (vs. a consensus near $279M), positioning the combined business as an end‑to‑end conversational AI platform with a stated ~$500M revenue opportunity.
• Despite the deal and upbeat guidance, shares fell 5.6% to $7.85 on very heavy volume, signaling profit‑taking or investor concern about execution, integration risk or dilution while the stock remains below its 200‑day moving average.
• Fundamental risks remain: SoundHound is still unprofitable (negative net margin and ROE) with analysts forecasting negative EPS for the year, and recent insider selling may amplify investor caution.

SoundHound AI, Inc. (NASDAQ:SOUN - Get Free Report) shares dropped 5.6% during trading on Tuesday . The stock traded as low as $7.79 and last traded at $7.85. Approximately 54,512,430 shares changed hands during trading, an increase of 105% from the average daily volume of 26,571,818 shares. The stock had previously closed at $8.32.

SoundHound AI News Roundup

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

• Positive Sentiment: SoundHound announced a definitive agreement to acquire LivePerson, creating an end-to-end conversational AI platform it says will combine proprietary voice AI with digital messaging, a customer footprint that includes 25 of the Fortune 100, a stated $500M revenue opportunity, an accelerated path to profitability and a balance sheet with no debt. This is the largest catalyst of the day and explains heavy market attention. Acquisition Press Release
• Positive Sentiment: The company updated FY‑2027 revenue guidance to $350–$400 million versus a consensus near $279 million, signaling stronger-than-expected top‑line growth and a faster path to scale — a material fundamental beat that supports longer‑term upside.
• Positive Sentiment: Commercial traction: earlier in April SoundHound said members of the Associated Carrier Group (Tier‑2/3 telecom operators) will use its platform for customer service and staff‑experience use cases, adding to enterprise distribution and recurring revenue potential. Partnership Article
• Neutral Sentiment: Multiple analyst and media writeups (Zacks, Yahoo) are spotlighting SOUN as a trending AI/tech name; these stories can boost retail interest but are not new fundamental news. Zacks Article
• Neutral Sentiment: Earlier market coverage noted a short‑term bounce (stock had climbed ~3% in another session), reflecting intraday volatility around AI names and M&A headlines rather than steady trend change. Market Reaction
• Negative Sentiment: Despite the deal and raised revenue outlook, the stock is trading down today on very heavy volume — which suggests profit‑taking or investor hesitation about deal execution, integration risk or dilution dynamics (common reactions to big acquisitions). Market technicals show the share price below its 200‑day moving average, a potential headwind for momentum traders.
• Negative Sentiment: Company remains unprofitable: recent quarter showed negative net margin (~‑8.7%) and negative ROE (~‑3.6%), with a consensus outlook still projecting negative EPS for the year. Investors weighing the acquisition will factor in near‑term profitability and integration risk alongside the growth narrative.

Analyst Upgrades and Downgrades

SOUN has been the topic of a number of recent research reports. Zacks Research raised SoundHound AI from a "strong sell" rating to a "hold" rating in a research report on Monday, February 9th. 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 note on Monday, March 2nd. Weiss Ratings reiterated a "sell (d-)" rating on shares of SoundHound AI in a report on Friday, January 9th. Piper Sandler reissued 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. Finally, DA Davidson set a $14.00 price target on SoundHound AI in a research report on Thursday, January 8th. 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 given a Sell rating to the stock. According to data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and an average target price of $14.93.

SoundHound AI Trading Down 5.6%

The company has a market cap of $3.32 billion, a price-to-earnings ratio of -156.97 and a beta of 2.71. The stock has a 50-day simple moving average of $7.43 and a 200 day simple moving average of $11.01.

SoundHound AI (NASDAQ:SOUN - Get Free Report) last posted its earnings results on Thursday, February 26th. The company reported ($0.02) EPS for the quarter, hitting the consensus estimate of ($0.02). SoundHound AI had a negative return on equity of 3.63% and a negative net margin of 8.71%.The firm had revenue of $55.06 million for the quarter, compared to analyst estimates of $53.88 million. During the same period last year, the company earned ($0.05) earnings per share. SoundHound AI's revenue for the quarter was up 59.4% compared to the same quarter last year. As a group, research analysts forecast that SoundHound AI, Inc. will post -0.34 EPS for the current fiscal year.

Insider Activity at SoundHound AI

In other news, COO Michael Zagorsek sold 52,968 shares of the firm'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 $359,652.72. Following the completion of the sale, the chief operating officer owned 1,734,491 shares in the company, valued at $11,777,193.89. This trade represents a 2.96% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, SVP Majid Emami sold 31,019 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 $210,619.01. Following the sale, the senior vice president directly owned 501,826 shares in the company, valued at approximately $3,407,398.54. The trade was a 5.82% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 307,973 shares of company stock valued at $2,091,110 over the last ninety days. Corporate insiders own 9.17% of the company's stock.

Institutional Investors Weigh In On SoundHound AI

Hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Kieckhefer Group LLC lifted its position in SoundHound AI by 47.2% in the third quarter. Kieckhefer Group LLC now owns 259,000 shares of the company's stock valued at $4,165,000 after buying an additional 83,000 shares during the last quarter. Osaic Holdings Inc. increased its position in shares of SoundHound AI by 14.0% during the second quarter. Osaic Holdings Inc. now owns 498,691 shares of the company's stock valued at $5,351,000 after acquiring an additional 61,212 shares during the last quarter. Mirae Asset Global Investments Co. Ltd. increased its position in shares of SoundHound AI by 252.8% during the third quarter. Mirae Asset Global Investments Co. Ltd. now owns 218,868 shares of the company's stock valued at $3,519,000 after acquiring an additional 156,835 shares during the last quarter. Carnegie Investment Counsel raised its stake in shares of SoundHound AI by 13.7% in the 3rd quarter. Carnegie Investment Counsel now owns 1,363,405 shares of the company's stock valued at $21,924,000 after acquiring an additional 164,725 shares during the period. Finally, Nisa Investment Advisors LLC lifted its holdings in shares of SoundHound AI by 97.7% in the 3rd quarter. Nisa Investment Advisors LLC now owns 90,041 shares of the company's stock worth $1,448,000 after acquiring an additional 44,496 shares during the last quarter. 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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