SoundHound’s AI Growth Story Is Just Getting Started

Key Points

• SoundHound stock shows investors its KPIs are still running hot, and at today's price the valuation does not match the underlying growth. 
• An opportunity to catch up to other artificial intelligence peers gives investors a massive bull run scenario.
• Wall Street analysts agree with this view, and so does the Vanguard Group.

The technology sector has been one of the points of largest interest in the United States stock market, though not all stocks are created equal in that space. Some have taken off to unrecognizable levels due to sheer popularity and the explosive growth (and adoption) in the world of artificial intelligence. Others weren’t so lucky as to command the sort of excitement these other names have been rewarded with recently.

That doesn’t take away from the fact that investors today still have several opportunities to consider in the sector, with stories that are just as exciting and just as likely to deliver attractive upside, essentially “catch up” to these other leaders. Within this list of opportunistic names lies SoundHound AI Holdings Inc. NASDAQ: SOUN.

This company displays all the growth rates of key performance indicators (KPIs) that any investor would dream of.

More than that, its current low price has earned the attention of some of the biggest players on Wall Street, looking to lock in a low price ahead of potential new bull runs in this stock.

With this in mind, investors will now have the opportunity to align their portfolios with the underlying business opportunity that lies beneath SoundHound’s business model. This should provide it with the fuel it needs to begin catching up to the rest of the sector.

SoundHound: A Sleeping Giant

Most investors would likely overlook a company like SoundHound due to its size. Its market capitalization is only $3.8 billion, making it unlikely to generate headlines anytime soon. However, some individuals see no issues with this and are more inclined to believe that the company could reach a larger scale in less time than expected.

For instance, those from the Vanguard Group justified building an equity stake worth up to $284.7 million as of early May 2025, representing 8.8% ownership in the entire business.

This not only goes against most of the typical investment mandates Vanguard undertakes, but also gives SoundHound a few other benefits regarding confidence.

With this level of ownership, the Vanguard Group can now offer SoundHound’s leadership team the kind of access to tools and capital necessary to easily scale to the order of magnitude it is now seeking to achieve. Of course, the tailwinds that can make this possible are also apparent to those who know where to look.

According to the company’s latest investor presentation, it can be noted that customers like Qualcomm Inc. NASDAQ: QCOM, Oracle Co. NYSE: ORCL, and even Chipotle Mexican Grill Inc. NYSE: CMG are now part of the broader adoption and proof of concept wave that will likely keep going in the future.

With this in mind, investors may wonder what the financial impact could be from having such high-profile clients in SoundHound's portfolio. The answer is that these metrics reflect the sort of momentum and upside that is expected out of this company’s future.

KPIs Running Hot for SoundHound

The first quarter of 2025 shows that SoundHound generated up to $29.1 million in revenues, representing a more than 100% growth rate compared to last year's quarter, which brought in only $11.5 million. This revenue growth is the most transparent testament to the adoption rates and client base that SoundHound has achieved.

The most important aspect to remember is that this revenue base comes in through subscriptions, meaning that future financials are as predictable as they are stable, which is a great quality to have during a volatile S&P 500 environment such as today’s since more investors are likely to start looking for this sort of safety and stability.

Now that we understand the stock trades at only 36% of its 52-week high, investors can examine this tremendous revenue growth and notice that the risk-to-reward ratio in terms of price appears heavily skewed in favor of the buyers. The Vanguard Group definitely seems to think along the same lines, and they weren’t alone.

Scott Buck, an analyst from HC Wainwright, reiterated his Buy rating on SoundHound stock as of mid-May 2025, also placing a valuation target of up to $18 per share. Compared to today’s low prices, this call would imply the company can rally by as much as 98% in a face-ripping bull run that'd likely leave most investors wishing they’d gotten in.

Well, those who see the writing on the wall won’t have to be part of that group since the low price and aggressive fundamentals do all the work for this company to become a success story in the coming quarters, especially considering the fact that it still has a lot of ground to make up compared to its peers in the artificial intelligence space.