Should You Invest in SoundHound AI Stock?

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Just five months back, SoundHound AI (SOUN) was like a promising new recipe that turned out just a bit too salty. Picture this: by the end of March, its shares were floundering at about $8, a mere whisper of their flamboyant, unsustainable high of nearly $25. It was a charming little stock, perfect for a moment of reckless enthusiasm. For a brief period, investing in this upstart was like tossing a coin into a fountain and making a wish-exciting, yet fraught with potential disappointment.

Ah, but change is the only constant, isn’t it? Recently, the stock has soared, fueled by two dazzling earnings reports and a few significant client wins that would make even a seasoned financier’s heart flutter. Check this out: as of September 24, this stock phenomenon has surged 107% since March 31 and 57% since the end of June. It’s like watching a friend unexpectedly win the lottery; you’re thrilled for them, but maybe a bit jealous too.

Guess who’s SoundHound AI’s largest shareholder? Spoiler alert: it’s not who you think!

Now, as I delve into these specifics, I promise it’s not just idle chitchat. The Russell 2000 index, which seems to be as fickle as the weather, rebalances quarterly. Meanwhile, the Vanguard Total Stock Market ETF (VTI), that cautious giant, takes its sweet time in updating positions. Since June’s little reshuffle in the Russell 2000, SoundHound has become a darling of those storied portfolios. It currently represents 0.22% of the Russell 2000, putting it snugly in the top 2.5% of that small-cap index. And you know what they say about the top 2.5%: it’s usually an awkward position at a dinner party.

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In VTI, Vanguard has amassed 11.7 million shares, worth about $194 million! Though small in the grand scheme of this massive fund-a mere 0.035%-Vanguard indeed leads the charge as the top dog in SoundHound’s ownership circle. Together with a few of its less-discussed funds, Vanguard holds a total of 8.9% of this quirky stock. Who’d have thought that a meticulous index fund could find romance in a tech stock that resembles more of a rollercoaster than a leisurely train ride?

But before you grab your phone to invest, we’ve got to ask: Is SoundHound AI truly worth the investment this September, or is it just another fleeting whim?

Recent victories of SoundHound AI

Now, if I’m honest, I see glimmers of goodness behind this stock’s evident charm:

  • The company smashed revenue estimates in August, boosting year-end guidance like a balloon at a birthday party. They tripled their sales year over year. My own quarterly reports never feature such flair, more like a sad nod and a whimper.

  • As the world rushes toward voice-activated systems-thank you, smartphone-SoundHound is leading the way, charming clients as diverse as Red Lobster, IHOP, Tencent, and none-too-famous automotive brands. It’s as if they threw a party and everyone, even those who usually stand in the corner, showed up.

  • And let’s not ignore their newest invention: the “visual understanding engine” known as Vision AI. This isn’t just a glorified name but an expansion of SoundHound’s expertise into visual territory, while still cradling its audio roots like a proud parent. Imagine a robot that actually gets the subtleties in conversations and visuals-an aspiring conversationalist, perhaps.

But I’m not yet throwing myself at the “buy” button for SoundHound AI

So here we are: SoundHound is undeniably making strides, building significant revenue, and, dare I say it, paving its path to glory. Yet, at the current price of 51 times trailing sales and with deeply negative profit margins, it’s like seeing an appealing dessert but knowing your stomach’s already in full revolt.

This company is still in its “show-me” stage, a place I’ve lingered in far too long, pondering whether my prudence is wisdom or mere cowardice. I might regret not jumping on this bandwagon, especially considering the large investments from Vanguard and other savvy folk, but I’m content with what I already have in my portfolio. I might call it a “strong hold,” which in financial circles sounds better than “just sitting here with my hands in my pockets.” Sure, it’s a long-term growth stock, but I’m not convinced it’s my finest tech pick for September 2025. The risk-and-reward balance feels like a seesaw that’s been tipped just out of my favor.

So for now, dear reader, I will sip my lukewarm coffee, admire SoundHound’s aspirations from a distance, and marvel at the absurdity of it all-because isn’t that just how investing feels sometimes? ☕

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2025-09-26 21:53