SoundHound AI (NASDAQ:SOUN) stock has given investors a strong sense of déjà vu recently. At the tail end of 2024, the shares sprinted higher, only to stumble badly before the familiar chords of Auld Lang Syne began to play – and that same rise-and-fall script has resurfaced over the past two months, with SOUN down almost half from its mid-October 2025 peak.
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On the surface, the pullback may look odd, given SoundHound’s triple-digit revenue growth and record sales through the first nine months of 2025. But markets don’t price stocks on revenue growth alone, especially in AI. In SOUN’s case, the decline makes more sense given concerns around profitability, valuation, and an overreliance on acquisitions as a growth driver.
Those concerns are echoed by investor David Jagielski, who acknowledges the company’s “impressive revenue growth” but argues that “the raw numbers conceal a couple of problems underneath the hood.”
Jagielski lays it out rather bluntly, pointing out that the “core questions” revolving around SoundHound relate to its ability to grow organically and start delivering profits. The investor does acknowledge that the acquisition of Amelia did help the company diversify its revenue streams (and away from an over reliance on the automotive sector), but he still wants to see evidence that SOUN can generate sales on its own.
Moreover, in Jagielski’s view, the revenue growth should have yielded a healthier bottom line. The investor cites the company’s 68% year-over-year revenue growth in Q3 2025, which is far higher than the 13% improvement in its adjusted net loss.
Then there’s the issue of SOUN’s valuation. Assuming quarterly revenue holds near $42 million, Jagielski estimates the stock is trading at roughly 27x sales. As he puts it, “That’s a high premium for a business that isn’t profitable, and that is growing primarily through acquisitions.”
Jagielski therefore suggests the very real possibility that SOUN will be falling further as the curtain falls on 2025, and urges investors to proceed cautiously.
“If you’re interested in SoundHound AI, you may want to be patient and take a wait-and-see approach with the stock, as the company still faces some considerable challenges ahead,” concludes Jagielski. (To watch David Jagielski’s track record, click here)
Wall Street, for its part, remains more optimistic. With 5 Buy recommendations and 2 Holds, SOUN carries a Moderate Buy consensus rating. Analysts’ 12-month average price target of $17.33 points to upside of nearly 57% from current levels. (See SOUN stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.