2025 has not been kind to SoundHound AI (SOUN), a stark contrast from its impressive performance in 2024 where it saw a remarkable rise of 835%. This year, however, it’s experienced a dip, with a decline of 35%. Yet, I find myself optimistic about the potential for SoundHound AI to bounce back.
As an ardent follower of technological advancements, I’m incredibly optimistic about SoundHound AI’s prospects for the second half of this year! With a favorable wind at its back, it has all the potential to become a massive success story. If the growth figures that management anticipates materialize, it could well be the standout performer we’ve been waiting for!
SoundHound AI is putting up impressive growth figures
SoundHound Artificial Intelligence stands out as a pioneer in the field of audio recognition technology, employing this capability to collaborate with advanced AI models that generate responses. While voice-activated AI systems like Siri or Alexa have been prevalent for some time, they’ve frequently left users feeling frustrated. However, SoundHound AI’s product significantly surpasses these technologies, demonstrating superior performance in terms of both precision and speed compared to human counterparts.
A larger number of individuals might embrace AI for various aspects of their life if it promises a swifter and smoother experience, however, this isn’t typically what happens. Consequently, the public may hold some reservations towards SoundHound’s product, but its swift expansion contradicts this perception.
During the initial three months, SoundHound AI’s annual income experienced an outstanding 151% increase compared to the same period last year, amounting to $29.1 million. Moreover, they continue to anticipate a 97% yearly growth for the entire year, which positions them among the fastest-growing companies in the AI industry. Yet, it’s uncommon for a stock to achieve such impressive results while its share price is falling. This might be due to investor apprehensions that the anticipated growth may already be factored into the stock’s current value.
SoundHound AI’s stock isn’t cheap. It trades for 41 times sales.
This level is significantly lower than its peak at the end of 2024, but it’s also higher than its average trading value throughout 2024. Regardless, a price of 41 times sales might be a fair valuation for the stock, given that it manages to maintain its nearly 100% revenue growth rate (which is incredibly challenging).
If SoundHound AI continues its pattern of rapid growth, it could be valued at approximately 20 times its sales figure after a year, which is a significant benchmark for many software companies. I’m optimistic that the company will show robust growth in the latter half of 2025 and throughout 2026, particularly if they begin to capitalize on their existing backlog.
Management could reveal what its expecting in 2026 soon
Towards the close of 2024, the remaining contract value that SoundHound AI had secured amounted to a staggering $1.2 billion. Given that its annual revenue over the preceding 12 months surpassed $100 million, this suggests an impressive growth trajectory for the company in the coming period.
Although management chose not to adjust their 2025 forecast during Q1, there are strong indications that SoundHound AI’s growth in 2026 might be equally impressive as its growth in 2025. Currently, the market isn’t quite prepared for this possibility, but if management subtly suggests that 2026 growth will be at a comparable pace to 2025’s, the stock price could potentially skyrocket due to this revelation.
Although SoundHound AI hasn’t announced when they will release their second-quarter results this year, last year’s Q2 results were made public in early August. Consequently, I plan on keeping an eye on their stock during that time period and listening carefully to what the management team has to say about 2026. During the Q2 2024 conference call, they provided hints about their projections for 2025, so I anticipate them doing the same this year as well.
SoundHound AI’s audio recognition technology is gaining popularity, as numerous businesses have chosen to partner with them. Currently, SoundHound AI is focusing on capitalizing on these partnerships, a move that may foster substantial expansion for the company and its shares.
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2025-07-20 14:16