Prediction: SoundHound AI Stock Will Beat the Market. Here's Why.
The voice AI solutions specialist, however, is growing at a faster pace than the conversational AI market.
SoundHound's growth potential could help the stock regain its mojo and jump higher over the next five years.
10 stocks we like better than SoundHound AI ›
It has been just over four years since SoundHound AI (NASDAQ: SOUN) made its stock market debut, and the voice artificial intelligence (AI) company's returns have been disappointing thus far, as it has gained just 28% during this period, as compared to the 45% gains clocked by the tech-heavy Nasdaq Composite.
What's worth noting is that wild stock price swings have been a common characteristic of SoundHound's journey on the market as a public company. The stock had a forgettable 2022 after its stock market listing, followed by a massive 1,000% jump in 2023 and 2024. This year, however, is turning out to be another woeful one for SoundHound investors, as the stock has lost nearly 52% of its value as of this writing.
The good part is that SoundHound seems capable of going on a bull run once again, replicating the impressive gains it clocked in 2023 and 2024 that were big enough to help it crush the broader market's returns. Let's look at the reasons why SoundHound stock could go on a market-beating run once again.
SoundHound AI offers conversational AI solutions such as voice-based AI agents, in-vehicle voice assistants, voice-based e-commerce, and voice-enabled AI chat assistants, among other things. Its solutions are deployed across multiple verticals such as restaurants, healthcare, contact centers, and connected devices.
The market that SoundHound serves is currently in a nascent state. Market research firm Imarc Group estimates that the conversational AI market was worth just over $13 billion last year. Its size is expected to jump by 11x through 2033, clocking a compound annual growth rate of 29%. SoundHound's growth in the past three years suggests that it is benefiting nicely from the end-market opportunity on offer.
As the chart indicates, the company's growth has picked up impressively in recent quarters.
This remarkable growth can be attributed to the company's rapid expansion in industries such as restaurants and automotive, where the adoption of voice-based AI solutions is growing at a nice clip.
SoundHound management pointed out in its first-quarter earnings report that its customers in the restaurant industry have been adding its voice AI-based answering and ordering solutions to more locations. The company is also expanding into new areas such as healthcare and retail. The robust adoption of SoundHound's solutions across multiple verticals is the reason why it reported impressive revenue growth of 151% in the first quarter.
Another thing worth noting is that SoundHound is building multiple revenue streams. It gets royalties from the usage of its solutions in automotive, smart TVs, and other connected devices, along with subscription revenue from applications such as food ordering and customer service. The company is looking to further monetize its offerings through advertisements.
Meanwhile, SoundHound's foray into the voice-based agentic AI market should ideally open another solid growth opportunity. The company recently announced its Amelia agentic AI platform through which customers can develop and deploy voice AI agents that can reason on their own and perform complex tasks.
The integration of AI in customer support is expected to jump by 20x over the next decade, with the market expected to generate more than $53 billion in revenue in 2034. This is another example of how SoundHound is going after lucrative opportunities in the conversational AI market that should help the company continue to grow at elevated levels in the long run.
SoundHound AI has turned to acquisitions to bolster its position in the conversational AI market. Its latest acquisition was that of Amelia last year, which improved its presence in the customer service market in verticals such as retail, finance, insurance, and healthcare. Similarly, its previous two acquisitions of Allset and Synq3 shored up its presence in online ordering, connected devices, and restaurants.
It won't be surprising to see SoundHound making more acquisitions in the future, thanks to its healthy balance sheet. The company is almost debt-free and has a net cash balance of more than $240 million, which will come in handy if it decides to improve its presence further in the conversational AI space. As such, there is a good chance that SoundHound AI could become a much bigger company in the long run.
The company is expecting to almost double its revenue in 2025 to $167 million, which is much faster than the pace at which the conversational AI market is set to grow. Assuming SoundHound AI averages annual revenue growth of even 30% over the next five years, which will be almost in line with the projected growth of its end market, its top line could hit $583 million in 2030.
If SoundHound stock trades at even 15 times sales at that time, which would be a big discount to its current price-to-sales ratio of 34, its market capitalization could jump to $8.75 billion. That points toward a potential upside of 127% over the next five years based on its current market cap, which could be enough to help it beat the broader market's gains during this period.
Before you buy stock in SoundHound AI, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and SoundHound AI wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,761!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,263!*
Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join .
See the 10 stocks »
*Stock Advisor returns as of May 19, 2025
Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Prediction: SoundHound AI Stock Will Beat the Market. Here's Why. was originally published by The Motley Fool
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
19 minutes ago
- Yahoo
Synchrony Financial (SYF) Reports Strong Earnings Growth Despite Share Buyback Completion
Synchrony Financial recently reported second-quarter earnings, showcasing a rise in net interest income to $4,521 million from the previous year, alongside an improved net income of $967 million. This announcement, combined with declared dividends and a completed share buyback plan repurchasing 2.25% of outstanding shares, likely supported the company's stock surge of 43% over the last quarter. This performance contrasts with broader market trends where the S&P 500 and Nasdaq peaked then slightly retreated amid varied corporate earnings. Synchrony Financial's initiatives and financial results may have thus contributed to its distinct price movement within the prevailing market landscape. We've identified 2 weaknesses with Synchrony Financial and understanding the impact should be part of your investment process. Rare earth metals are the new gold rush. Find out which 26 stocks are leading the charge. The recent boost in Synchrony Financial's net interest income and net income, in conjunction with its completed share repurchase plan, underscores potential alignment with the narrative of strengthening its financial position through diligent capital management. This ties in with the company's focus on enhancing customer loyalty and increasing purchase volume through partnerships and new card offerings, which could support future revenue growth despite previously observed challenges in purchase volume and liquidity yields. Over the past five years, Synchrony Financial's total return surged 231.17%, reflecting significant long-term shareholder value appreciation. In comparison to the recent one-year period, the company outperformed both the US market and the Consumer Finance industry, which recorded returns of 14.8% and 30.8% respectively. Such performance highlights Synchrony Financial's resilience and effective strategies amidst fluctuating market conditions. In light of the recent news, analysts' forecasts for revenue growth of 23.8% annually over the next three years could be further supported by Synchrony's ability to maintain strong capital positions through share buybacks and dividends, enhancing its net interest income. However, a shrinkage in profit margins to 20.1% could temper earnings growth expectations, impacting the anticipated increase to $3.3 billion by 2028. The current share price of $69.44, trading at an 11.6% discount from the US$77.5 price target, suggests potential future appreciation if the company successfully navigates its growth catalysts. Assess Synchrony Financial's previous results with our detailed historical performance reports. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SYF. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten
Yahoo
19 minutes ago
- Yahoo
IQVIA Holdings (IQV) Updates 2025 Revenue Guidance and Completes Share Buyback
IQVIA Holdings recently updated its earnings guidance for 2025 with expectations of revenue ranging between $16,100 million and $16,300 million. This update coincides with the company's Q2 earnings announcement, showing an increase in sales to $4,017 million but a decline in net income to $266 million. During the last quarter, IQVIA's share price rose 11%, likely supported by its ongoing share buyback program, where the company repurchased 3,985,000 shares. Despite the broader market fluctuations amid record highs reached by the S&P 500 and Nasdaq, IQVIA's proactive measures appear aligned with its recent share price uptick. We've discovered 1 weakness for IQVIA Holdings that you should be aware of before investing here. Trump has pledged to "unleash" American oil and gas and these 22 US stocks have developments that are poised to benefit. The recent update in IQVIA Holdings' earnings guidance and its ongoing share buyback program suggest a focused strategy to enhance shareholder value, aligning with the uptick in its share price. However, the total return including share price and dividends over the past five years shows a 2.05% decline, indicating challenges in achieving sustainable long-term growth. This performance contrasts with the broader market's one-year performance, where IQVIA underperformed the US Life Sciences industry, which itself experienced a 22% decline. The company's anticipated revenue range of US$16.1 billion to US$16.3 billion by 2025 and partnerships like those with NVIDIA could provide a cost advantage and potentially elevate margins, important factors amid macroeconomic pressures. Analysts foreseeing revenue growth of 5.2% annually over the next three years could see risks should sector funding conditions deteriorate. The current share price is below the consensus price target of US$190.67, suggesting potential for appreciation if earnings and revenue forecasts materialize as expected, though differing analyst views present varying degrees of confidence in this forecast. Understand IQVIA Holdings' track record by examining our performance history report. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include IQV. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
PepsiCo Stock Just Had Its Best Day in Over 5 Years. Is The Dividend King a No-Brainer Buy Now?
Key Points Pepsi stock soared last week in response to better-than-expected earnings and guidance. The company has been severely impacted by rising cost inflation and a decline in consumer spending. The stock remains a great value and has a high yield. 10 stocks we like better than PepsiCo › On July 17, PepsiCo (NASDAQ: PEP) stock had its best single session in over five years -- gaining 7.5% after the company reported second-quarter 2025 earnings. It was a sigh of relief for long-term investors who have endured an extended period of underperformance. Even after the rally, Pepsi is still down year to date, and the stock is up a little over 6% in the last five years compared to a whopping 95% return in the S&P 500 (SNPINDEX: ^GSPC). However, those gains don't factor in Pepsi's sizable dividend, which yields 4%. Pepsi has raised its payout for 53 consecutive years, earning it a coveted spot on the list of companies that have raised their dividends for at least 50 years -- known as Dividend Kings. Here are some key takeaways from Pepsi's latest earnings, highlighting why the dividend stock remains a compelling buy for investors seeking to boost their passive income. The worst may be over for Pepsi When Pepsi reported its first-quarter 2025 results in April, the beverage and snack giant slashed its full-year guidance due to revenue and earnings declines. The company cited inflation pressures, consumer demand challenges, geopolitical uncertainties, and tariff headaches. A lot was going wrong for Pepsi, but its latest quarter showed that the company is heading in the right direction. In the second quarter, Pepsi benefited from a weaker U.S. dollar, which improved its foreign exchange. A weaker dollar means that revenue generated in foreign currency goes further when Pepsi reports those results in dollars. Pepsi also saw volume declines level off, with convenient foods volumes down 2% and flat beverage volumes. In addition to its flagship Pepsi brand, the company owns beverage brands like Mountain Dew, Gatorade, Tropicana, and Aquafina. It also owns snack giant Frito-Lay (Lay's, Cheetos, Doritos, Fritos, etc.) and Quaker Oats. Pepsi has been acquiring a variety of snack brands to diversify its lineup and appeal to health-conscious consumers. All told, the favorable foreign exchange, paired with decent performance throughout the business, gave Pepsi the confidence to confirm its full-year guidance for low-single-digit organic growth and flat earnings. It's not great, but it's a step in the right direction for a company that had been experiencing negative growth. Pepsi is revamping its product lineup Pepsi is doing a good job of focusing on what it can control by investing in top brands through marketing efforts and adjusting packaging sizes to give customers more options at a lower cost. On its second-quarter earnings call, Pepsi discussed international cost-cutting efforts, such as closing two plants to better align production with demand, reducing fixed costs, investing in its enterprise resource planning system, managing travel and expenses, revisiting third-party contracts, and boosting productivity. Another big change for Pepsi is shifting its beverage and snack lineup to align with measures by the U.S. Department of Health and Human Services and U.S. Food and Drug Administration to phase out synthetic dyes. Reports indicate that Coca-Cola has agreed to use cane sugar instead of high-fructose corn syrup. So there's an industrywide effort to overhaul supply chains to include better ingredients. Pepsi's recent acquisitions, such as Siete Foods, play into the push toward healthier snacks. Pepsi-owned SunChips use multigrain. And PopCorners are baked instead of fried. The company already has some brands that are aligned with the current administration's initiative. But its blockbuster snack brands are not. That's about to change with the relaunch of Frito-Lay's Simply lineup, which removes artificial ingredients. Pepsi is relaunching Lay's and Tostitos under the Simply lineup in the fourth quarter or first quarter of next year and exploring the relaunch of Doritos, Cheetos, and Ruffles. The move showcases Pepsi's commitment to investing in its top brands and willingness to clean up its lineup to adhere to changes in consumer preferences and regulatory pressures. Pepsi is noticeably discounted from its historical valuation Pepsi can't control the business cycle or trade policy, but it is taking steps to lower costs and make investments that should help the company in the long run. In the meantime, the stock sports a juicy 4% yield and the valuation is incredibly cheap. As mentioned, Pepsi's full-year guidance calls for flat earnings per share (EPS) growth. Last year, it earned $8.16 in core EPS. Based on its stock price as of market close on July 18 of $143.24 per share, Pepsi would have a price-to-earnings ratio of 17.6 if it hits its full-year goal. That's dirt cheap for what has historically been a premium-priced Dividend King. Over the last decade, Pepsi has a median P/E of 26.2 -- so the stock tends to command a relatively expensive valuation. To be fair, Pepsi isn't at the top of its game like it was a few years ago, so it deserves to trade at a discount. But not as steep as what we are seeing in today's market. A passive income powerhouse to buy now Pepsi's second quarter was a reminder of the importance of investor sentiment and narratives in driving stock prices. Pepsi's latest results were mediocre at best, but the stock was so beaten down that OK was more than good enough. A stock's price can get separated from fundamentals (to the upside and the downside) due to changes in sentiment. With the dust settled, I'd argue that Pepsi is still undervalued given its portfolio of top brands across food and beverage categories. Some investors may prefer to wait to buy Pepsi until the company shows more convincing evidence of a return to growth. But in the meantime, the valuation is dirt cheap and the yield is high. Value investors looking for passive income may want to scoop up shares of the Dividend King and get paid to wait for the company to overcome its challenges. Should you buy stock in PepsiCo right now? Before you buy stock in PepsiCo, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and PepsiCo wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $665,092!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,050,477!* Now, it's worth noting Stock Advisor's total average return is 1,055% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Daniel Foelber has positions in PepsiCo. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. PepsiCo Stock Just Had Its Best Day in Over 5 Years. Is The Dividend King a No-Brainer Buy Now? was originally published by The Motley Fool
