SoundHound AI (NASDAQ:SOUN) has not been shy about making acquisitions to boost its value proposition, and yesterday it added another to the list by announcing the purchase of Interactions, a customer experience AI company with a robust enterprise client portfolio. The market, however, reacted cautiously sending the stock down 5% in the aftermath of the announcement.
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Yet, Northland analyst Michael Latimore views the deal as a strategic move that strengthens SoundHound’s long-term growth story.
The move makes sense when you look at Interactions’ evolution. Founded in 2004 as a traditional helpdesk provider, the company quickly pivoted toward automation and built a hybrid model that blends automated systems with human-in-the-loop support. Today, its platform leverages speech recognition, natural language understanding, and generative AI to power virtual agents, while an adaptive layer determines when human involvement is necessary. Workflow orchestration ensures that only the most essential tasks reach live agents.
Based on the $60 million cash outlay for the deal and the company’s track record with past acquisitions, Latimore estimates Interactions generates around $25–30 million in revenue. With the rise of generative AI and reliance on third-party human agents, the analyst reckons the business is “stable and profitable.”
For SoundHound, the Interactions deal follows a familiar playbook. Just as with the Amelia acquisition in August 2024 and the SYNQ3 purchase in January 2024, the strategy is to infuse its own AI technology into the acquired customer base while adding corporate infrastructure to reignite growth. Interactions’ enterprise clientele has already shown increased appetite for voice AI, and Latimore argues SOUN is well positioned to “fortify the technology advancements” those customers are seeking.
Even so, full automation won’t happen overnight. Latimore expects the human agent component will stick around for now, though the long-term goal is to shift more of the workload to AI. If SoundHound can accelerate Interactions’ growth, the analyst believes the acquisition should prove accretive to valuation. Encouragingly, the move also signals that the Amelia integration is on track.
And that merits a new price target. Latimore lifted his objective on SOUN from $14.5 to $15.5, suggesting about 10% upside from here, while maintaining an Outperform (i.e., Buy) rating. (To watch Latimore’s track record, click here)
Latimore is joined by 4 other analysts in the SOUN bull camp while 1 Hold can’t detract from a Strong Buy consensus rating. Meanwhile, the $15.53 average target implies shares will climb 9% in the months ahead. (See SOUN stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.