Shares of SoundHound AI (SOUN) have taken a sharp hit in recent days. The voice-AI company has been a market favorite during previous rallies, but its latest sell-off is raising fresh concerns about growth, valuation, and the road ahead. Notably, SOUN has dropped 18% over the past five days and is now down more than 40% over the past month. The stock recovered slightly on Friday, trading up about 1% as of this writing.
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Despite near-term challenges and broader macro uncertainty, SoundHound AI’s long-term prospects remain promising. The company is well-positioned to benefit from the growing demand for voice-enabled technologies. Notably, Wall Street analysts continue to give SOUN a Moderate Buy rating, indicating a potential upside of over 40% for patient investors.
What’s Behind the Recent Decline?
Investors have been selling SOUN stock despite a strong Q3 earnings beat, as concerns over its high valuation and the broader AI and growth-stock market outweigh the positive results. While revenue surged and adjusted losses came in smaller than expected, the market remains cautious about profitability and whether the company can sustain its rapid growth.
This week, SOUN stock faced additional pressure from broader economic uncertainties. Investors are worried about whether the Fed will cut rates in December. At the same time, the economy remains unclear as government agencies recover from the shutdown, making it harder to get a clear view of the job market.
What Lies Ahead for Investors?
SoundHound continues to benefit from growing demand for voice AI and an expanding customer base. While the company has yet to turn profitable, its solid revenue growth and improved outlook highlight strong long-term potential. SoundHound raised its full-year revenue outlook to $165–$180 million, up from the prior range of $160–$178 million.
On Wall Street, H.C. Wainwright’s four-star-rated analyst Scott Buck has the highest price target for SOUN at $26. Buck sees SoundHound moving toward profitability, supported by expanding margins and a clear path to positive EBITDA, which form the basis of his bullish outlook.
He is also confident in the company’s long-term growth. As more industries adopt SoundHound’s voice AI technology, Buck expects the company to scale operations, boost revenue, and steadily approach profitability.
Buck’s price target implies an upside of over 100% in SOUN from the current levels.
Is SOUN Stock a Good Buy?
According to TipRanks, SOUN stock has received a Moderate Buy consensus rating, with two Buys and four Holds assigned in the last three months. The average SoundHound stock price target is $17.20, suggesting a potential upside of 41.3% from the current level.
