SoundHound AI (SOUN) shares slipped nearly 7% today as of writing after a top analyst at Piper Sandler downgraded the stock from Buy to Hold, citing concerns over the company’s path to profitability. Analyst James Fish kept his $12 price target but noted that the stock’s recent 30% rally has made the risk-reward outlook more balanced.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
SoundHound AI offers a flexible voice AI platform that helps businesses bring conversational intelligence to their products and services.
Here’s Why Piper Turns Cautious on SOUN Stock
Piper Sandler has grown cautious on SoundHound, citing execution risks in the second half of 2025. The firm highlighted the potential difficulty the company may face in juggling its investments in growth with its goal of achieving profitability.
Piper’s latest report raised doubts about whether SoundHound can effectively balance its push for profitability with the demands of scaling its Amelia platform and expanding its go-to-market efforts. Fish noted, “It’s hard to do both,” cautioning that the need for additional investments, along with possible earn-out obligations tied to Amelia, could put pressure on earnings and lead to shareholder dilution.
While Piper believes SoundHound is on track to meet its 2025 targets, the firm emphasized that the guidance suggests a sharp acceleration in the second half of the year, especially in the auto segment, which remains sensitive to broader production headwinds. Notably, industry checks also point to sluggish adoption of standalone AI solutions, with macroeconomic uncertainty and cautious enterprise spending further weighing on the pace of implementation.
According to Fish, SoundHound will need to generate around $20 million in additional revenue in the latter half of 2025 and $50 million in 2026 to stay on pace. Much of this revenue may come from in-period deals, which they caution could be of lower quality.
Is SOUN Stock a Good Buy?
According to TipRanks, SOUN stock has received a Moderate Buy consensus rating, with four Buys and three Holds assigned in the last three months. The average SoundHound’s stock price target is $11.50, suggesting a potential upside of 5.8% from the current level.
