Latest news with #SoundHound
Yahoo
a day ago
- Business
- Yahoo
SoundHound Drops 57% From Its Peak. Is SOUN Stock a Buy Now?
SoundHound (SOUN), the voice technology company behind conversational artificial intelligence (AI) solutions, has seen its stock take a beating in recent months. After soaring to a high of $24.98, the stock has plunged over 57% from that peak and is down nearly 49.4% year-to-date. While the stock is still up 158% over the past 12 months, the recent selloff has eroded significant value from its market cap. Part of the downward pressure came from Nvidia's (NVDA) decision to exit its position in SoundHound. That move, combined with broader macroeconomic uncertainty, spooked investors and contributed to the stock's sharp decline. Adding to the concern is the company's high valuation. SoundHound is currently trading at a steep price-sales (P/S) ratio of over 46.6x, implying that the market is already pricing in a lot of positives. Elon Musk's Tesla Makes History With 'First Time That a Car Has Delivered Itself to Its Owner' This Defense Stock Could Be the Next Palantir. Should You Buy It Now? Cathie Wood Is Pounding the Table on AMD Stock. Should You Buy Shares Now? Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! However, SoundHound's fundamentals are showing signs of strength. Its revenue growth is accelerating. In the first quarter of 2025, SoundHound's top line surged by 151% year-over-year. That follows an impressive increase of 101% in Q4 2024, 89% in Q3, and 54% in Q2. The acceleration in its top-line growth rate reflects growing demand for SoundHound's AI-driven voice technology. The company's momentum appears sustainable as its addressable market is rapidly expanding with businesses across multiple sectors adopting voice AI technology. Moreover, with a diversifying customer base and a strong sales pipeline, SoundHound is well-positioned to capitalize on growing demand. SoundHound is delivering impressive results, and the momentum in its business is likely to sustain. In its latest quarterly report, the company announced Q1 revenue of $29.1 million, up 151% year-over-year. Moreover, SoundHound has taken steps to diversify its revenue customer base. For the first time, no single customer accounted for more than 10% of total revenue, a notable shift that reduces customer concentration risk and reflects the company's growing reach across different industries. Customer demand is building. Bookings continue to climb, both sequentially and on a strong year-over-year basis, reflecting heightened interest in SoundHound's voice AI solutions. This traction is particularly visible in the restaurant and enterprise sectors, where location growth and customer service applications are accelerating. Meanwhile, in the automotive segment, SoundHound is benefiting from rising average selling prices, thanks to the deeper integration of its generative AI capabilities. Management remains confident about the future, citing the large pipeline and a continually expanding total addressable market (TAM). This positions SoundHound for substantial growth in the years ahead. A growing number of OEMs and restaurant chains are showing enthusiasm for the company's voice commerce solution, which augurs well for future growth. SoundHound's strategic acquisitions are also paying off. The integration of Synq3 is already helping SoundHound upsell its existing product suite to a broader customer base. The Allset acquisition is enabling the company to connect restaurant partners with its growing automotive clientele, creating a unique voice commerce ecosystem. Meanwhile, the acquisition of Amelia is helping SoundHound break into new industries, while also expanding its presence with existing merchants. On the operational front, SoundHound continues to evaluate and improve certain lower-margin legacy contracts, either enhancing their profitability or phasing them out altogether. These efforts, combined with a ramp-up in revenue, are expected to drive sequential improvements in adjusted EBITDA throughout the year. Notably, the company remains focused on its path to profitability. With several cost discipline measures already in place, SoundHound reiterated its expectation to reach adjusted EBITDA profitability by the end of 2025. Given the valuation concerns and macroeconomic uncertainty, not all analysts endorse buying SOUN stock. As a result, the stock holds a 'Moderate Buy' consensus rating. Still, the current pullback might represent a compelling entry point as SoundHound is still in the early stages of a compelling growth story, with strong revenue expansion and increasing demand for voice AI technology across industries. On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on


Globe and Mail
5 days ago
- Business
- Globe and Mail
Should You Forget SoundHound AI and Buy 2 Artificial Intelligence (AI) Stocks Right Now?
SoundHound AI (NASDAQ: SOUN), a developer of artificial intelligence (AI)-powered speech and audio recognition tools, has been a polarizing investment ever since its public debut three years ago. The bulls were initially impressed by its rapid growth, expanding customer base, and the disruptive potential of its tools, which could be customized for restaurants, vehicles, consumer electronics, and other markets. Nvidia 's minor investment in the company raised even more green flags. However, a lot of SoundHound's growth was driven by its acquisitions rather than its organic improvements -- and it remained deeply unprofitable. It also faces stiff competition from similar voice recognition platforms, and many investors fled after Nvidia sold its entire stake earlier this year. From 2024 to 2027, analysts expect SoundHound's revenue to increase at a compound annual growth rate (CAGR) of 48%. They also expect its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to turn positive by the final year. That's a promising growth trajectory, but it's still richly valued at 20 times this year's sales, so any bad news could easily sink its stock. Instead of investing in SoundHound AI, it might be smarter to invest in two other AI-oriented stocks that are on firmer ground: Arista Networks (NYSE: ANET) and Micron (NASDAQ: MU). 1. Arista Networks Arista Networks is a top networking hardware and software company. But unlike its larger competitor, Cisco, which locks in its customers with proprietary hardware and software, Arista uses off-the-shelf chips and open-source software that are compatible with a broad range of hardware. It also sells low-latency switches, optimized for hyperscale data center and cloud networks, and its CloudVision platform enables those clients to easily monitor their own cloud deployments. Arista's flexible, modular, and scalable strategy made it a top choice for cloud giants like Meta Platforms and Microsoft. So, while Cisco might be a better one-stop shop for enterprise and campus customers, Arista is a more focused play on the booming cloud and AI infrastructure markets. From 2019 to 2024, Arista's revenue rose at a CAGR of 24%, while its adjusted net income increased at a CAGR of 30%. From 2024 to 2027, analysts expect its revenue and earnings per share (EPS) to grow at a CAGR of 19% and 15%, respectively. That growth should be driven by the soaring need for cloud and AI infrastructure upgrades, its gradual expansion into the enterprise and campus markets to challenge Cisco, and the rising adoption of its integrated security services. Arista's stock isn't cheap at 39 times this year's earnings, but it could still have plenty of room to grow. 2. Micron Micron is one of the world's largest producers of DRAM (dynamic random-access memory) and NAND memory chips. It controls smaller slices of both markets than South Korea's Samsung and SK Hynix, but Micron manufactures slightly denser DRAM chips with its 1-beta process. That technological edge makes it a top choice for performance-oriented cloud and AI companies. Micron is a cyclical company that follows the memory market's boom and bust cycles. Its last bust occurred in 2023, when the PC market lapped its pandemic-driven acceleration, the 5G smartphone upgrade cycle cooled, and more data centers prioritized their purchases of Nvidia's AI-oriented graphics processing units (GPUs) over new memory chips. But from fiscal 2024 (which ended last August) to fiscal 2027, analysts expect Micron's revenue and EPS to grow at a CAGR of 23% and 148%, respectively. The company's growth is accelerating again as the PC and smartphone markets stabilize and more data center customers install solid-state drives (SSDs) and high-bandwidth memory (HBM) chips to support the latest cloud and AI applications. That's an impressive growth trajectory for a stock that trades at just 13 times next year's earnings. Micron is likely trading at that lower valuation because it's a cyclical stock. However, it still has plenty of upside potential in this boom cycle as the cloud and AI markets generate fresh tailwinds for its business. Should you invest $1,000 in SoundHound AI right now? Before you buy stock in SoundHound AI, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks 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 $704,676!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $950,198!* Now, it's worth noting Stock Advisor 's total average return is1,048% — a market-crushing outperformance compared to175%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 June 23, 2025
Yahoo
5 days ago
- Automotive
- Yahoo
How Strong Is SOUN's Automotive Voice AI Pipeline Going Into 2025?
SoundHound AI SOUN enters the second half of 2025 with a robust and expanding automotive pipeline, driven by shifting OEM preferences and its differentiated voice AI capabilities. During its first-quarter 2025 earnings call, management emphasized a notable industry trend — automakers are moving away from big tech-voice platforms and seeking more customized, white-labeled solutions. This shift plays directly into SoundHound's strengths, especially its Polaris model, which offers faster response times and better accuracy in noisy SoundHound is seeing renewed interest from both EV and internal combustion engine OEMs, including global brands pursuing pilots and proofs of concept for its voice commerce solution. The company is no longer viewed as a back-end feature on the bill of materials, it is increasingly seen as a revenue enabler, thanks to transactional-voice capabilities such as in-car food ordering and parking some softness in auto unit volumes during first-quarter 2025 due to macro uncertainty, management's sentiment remains bullish. SoundHound's voice commerce platform has gained traction quickly, with more than 15 major restaurant brands integrated and multiple OEMs accelerating adoption timelines. This indicates meaningful potential for royalty and subscription revenue uplift in the coming quarters. While auto unit now represents a smaller portion of the company's diversified revenue base, the strategic significance of the segment is growing. With a strong pipeline, expanding product offerings and increasing OEM engagement, SoundHound appears well-positioned to capitalize on a generational shift in the adoption of in-vehicle voice technology during the second half of 2025 and beyond. In the competitive landscape of automotive voice AI, Cerence Inc. CRNC and Inc.'s AMZN Alexa Auto emerge as key challengers to SoundHound. Cerence has long been embedded in the automotive space, powering voice assistants for legacy OEMs with deep integration into infotainment and vehicle systems. However, CRNC has faced headwinds in transitioning to cloud-based and transactional voice services, where SoundHound's hybrid-cloud and voice-commerce capabilities are gaining Amazon's Alexa Auto leverages its consumer ecosystem to deliver in-car voice functionality. Its strength lies in smart home integration and brand familiarity, but OEMs increasingly seek white-labeled, customizable alternatives, an area where SoundHound automakers showing a preference for flexible, branded solutions over platform lock-in, SoundHound's edge lies in its proprietary voice stack, multilingual support and real-time transactional capabilities. As OEMs pivot from big tech to specialized providers, SoundHound is narrowing the gap and potentially reshaping the competitive dynamic. SoundHound's shares have gained 16.7% in the past three months, outperforming the Zacks Computers - IT Services industry's 7.4% growth. Image Source: Zacks Investment Research In terms of its forward 12-month price-to-sales ratio, SOUN is trading at 21.41, up from the industry's 19.08. Image Source: Zacks Investment Research Over the past 60 days, the Zacks Consensus Estimate for SOUN's 2025 loss per share has remained unchanged at 16 cents. Nonetheless, the estimated figure indicates an improvement from the year-ago loss of $1.04 per share. Image Source: Zacks Investment Research SOUN currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Cerence Inc. (CRNC) : Free Stock Analysis Report SoundHound AI, Inc. (SOUN) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
5 days ago
- Automotive
- Yahoo
SoundHound AI vs. Cerence: Which Voice AI Stock Holds More Promise?
Voice-driven artificial intelligence is emerging as a key battleground in tech, and SoundHound AI, Inc. SOUN and Cerence Inc. CRNC have positioned themselves at the forefront of this niche. SoundHound is a newer entrant leveraging its conversational voice platform across industries from automotive to restaurants, while Cerence is an established leader in in-car voice assistants for automakers. Both companies operate in the voice AI space, and a comparison is timely as generative AI amplifies demand for voice their common focus on voice AI, SoundHound and Cerence differ in scope and strategy. SoundHound's technology spans multiple industries, powering voice ordering in restaurants and voice-enabled customer service, in addition to automotive voice assistants. In contrast, Cerence is focused on the mobility market, supplying voice assistant software to nearly every major car OEM. The broader market reach of SoundHound compared to Cerence's auto specialization sets the stage for an intriguing comparison. Let's analyze which voice AI stock offers better upside potential now. SoundHound has emerged as a leader in voice AI by combining advanced speech recognition with large language models to power natural, voice-based interactions. Its Polaris AI engine delivers fast, accurate responses — even in noisy settings — supporting applications across industries. The company's acquisitions of SYNQ3, Amelia and Allset have expanded its capabilities in restaurant ordering, customer service and voice commerce. Now operating with a three-pronged strategy — enterprise agents, automotive assistants and voice commerce —SoundHound is gaining traction among automakers and tech firms. Its innovation pace and platform versatility position it as a strong independent player in the voice AI broad industry reach opens up significant growth potential. It's gaining traction in restaurants, with voice ordering in nearly 13,000 locations, and in automotive, powering voice AI for more than 20 car brands. Its enterprise solutions are used by top global banks, reflecting strong B2B adoption. This diversification limits dependence on any single customer. As generative AI demand grows, SoundHound's independent, brand-friendly platform appeals to companies wary of Big Tech. Partnerships with firms like Lucid Motors and NVIDIA extend its footprint into luxury EVs and edge AI. Overall, SoundHound is well-positioned to scale across multiple high-growth first-quarter 2025 results highlight strong momentum, with revenues surging 151% year over year to $29.1 million, driven by organic growth and recent acquisitions. Key contributions came from restaurant and enterprise voice AI solutions, supporting diversification. While the GAAP gross margin fell to 37% due to integration costs, the adjusted gross margin stood at 51%, with management targeting margin improvements over the next 18 to 24 months. The company posted a non-GAAP net loss of $22.3 million but remains well-capitalized, holding $246 million in cash and no debt. The full-year revenue guidance of $157-$177 million implies a near doubling, and SoundHound is targeting adjusted EBITDA breakeven by year-end, signaling a focus on scaling efficiently toward operational momentum, SoundHound faces formidable competition from deep-pocketed tech giants. Alphabet GOOGL, Amazon AMZN and Apple AAPL dominate the AI-powered voice assistant market. Google Assistant powers Android Automotive and is well integrated into in-car experiences globally. Amazon's Alexa, backed by AWS and a large developer community, is expanding into vehicles and has an entrenched smart home base. Apple's Siri benefits from tight integration across its ecosystem, especially via iPhones and CarPlay. These larger players — Alphabet, Amazon and Apple — could leverage their ecosystems to challenge SoundHound's growth. Another risk is the company's heavy spend on R&D and marketing (up 66% year over year due to acquisitions), which must eventually translate into sustainable customer wins. Cerence stands as the leading voice AI provider in the automotive industry, with its technology embedded in more than 500 million vehicles and powering roughly 51% of cars produced in the trailing 12 months ending the fiscal second quarter. Spun off from Nuance Communications, it brings decades of automotive voice expertise and serves nearly all major automakers, offering them white-labeled voice assistants that preserve brand identity and data control — an edge over Big Tech undergoing restructuring, Cerence remains focused on innovation. Its upcoming Cerence XUI platform blends on-device processing with generative AI, while its proprietary CaLLM model (developed with NVIDIA) aims to enhance in-car voice capabilities. Integration with OpenAI's ChatGPT via Microsoft Azure further strengthens its generative AI offerings. Beyond autos, Cerence is expanding into retail and mobility through partnerships with Code Factory and Tuya while defending its IP through active litigation. This combination of scale, neutrality and next-gen AI investment reinforces Cerence's leadership in voice-driven mobility Cerence's fiscal second-quarter results reflect progress in its turnaround strategy. Revenues rose 15% year over year to $78 million, slightly exceeding guidance due to a one-time $21.5 million fixed-license boost. The gross margin improved to 77% on a favorable software mix. Restructuring efforts paid off, and non-GAAP operating expenses dropped 32% to $34.1 million, fueling a sharp profitability rebound. Adjusted EBITDA surged to $29.5 million, well above guidance, while GAAP net income reached $21.7 million — a major swing from last year's loss. Free cash flow remained strong at $13.1 million, and the company ended the quarter with $122.8 million in cash after partially repurchasing its 2025 convertible maintained fiscal 2025 revenue guidance of $236-$247 million, down from fiscal 2024 due to the loss of the Toyota contract and fewer license deals. Still, it expects adjusted EBITDA of $28-$34 million, showing a focus on profitability over growth this year. While the fiscal third quarter will face tough comps, Cerence's leaner cost base positions it to stay cash-flow positive. Cerence faces several challenges despite a strong fiscal second-quarter performance. The absence of fixed-license revenues in the second half will pressure margins and profitability. Auto OEMs are pushing for price reductions amid macro uncertainty and potential tariff impacts. Professional services revenues are declining faster than expected due to product standardization and OEMs' internalizing integration. Legal disputes with Samsung and Microsoft add costs and risks. Lastly, Cerence remains exposed to global auto production trends, with volumes flat and China still a weak spot. SoundHound stock has risen 7.7% over the past three months. Meanwhile, Cerence shares have rallied 10.6% over the same period. Both SOUN and CRNC stocks have underperformed the Zacks Computer and Technology sector during the period. Share Price Performance Image Source: Zacks Investment Research Having a market capitalization of around $3.85 billion, SoundHound's stock has been volatile, reflecting the high expectations built into its valuation. After a huge AI-fueled rally in 2023, the stock pulled back in 2025. Even if revenues double as expected, the forward price-to-sales would be roughly 20X, still lofty relative to most software a market capitalization of around $407.5 million, Cerence trades at roughly 1.61X trailing 12-month sales. SOUN trades at about 20.67X forward 12-month trailing sales, much higher than CRNC's. Image Source: Zacks Investment Research The loss estimate trend for SOUN has remained unchanged over the past 60 days, whereas the market remains skeptical about CRNC's ability to sustain profitability. Over the same period, the estimate has changed to a loss from break-even earnings for CRNC stock for the current estimated figure for SOUN's 2025 bottom line reflects an improvement from a year-ago reported loss of $1.04 per share, unlike CRNC. Cerence management has cited sluggish EV sales and softness in China as headwinds in the current year. For SOUN Image Source: Zacks Investment Research For CRNC Image Source: Zacks Investment Research Both SoundHound AI and Cerence are prominent players in voice AI, yet they present starkly different investment profiles. SoundHound is a high-growth upstart, doubling its revenues and expanding aggressively across industries with cutting-edge voice AI both SoundHound and Cerence — each carrying a Zacks Rank #3 (Hold) — are credible players in voice AI, SoundHound's diversified industry exposure, strong revenue growth and ambitious roadmap position it for broader upside as voice interfaces gain mainstream adoption. Cerence, though more deeply entrenched in the auto market, faces growth constraints and contract headwinds. Given SoundHound's expanding customer base, product versatility and potential to scale across sectors beyond autos, it appears better positioned for long-term growth despite its premium valuation. Cerence's stock arguably has a more limited immediate upside, with its growth currently constrained by industry softness. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Cerence Inc. (CRNC) : Free Stock Analysis Report SoundHound AI, Inc. (SOUN) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
5 days ago
- Business
- Yahoo
This Artificial Intelligence (AI) Powerhouse Could Be Just Getting Started
SoundHound AI specializes in voice AI technology. Its neutral approach to customers and streamlined focus are advantages over larger competitors. There are risks, but the potential upside makes SoundHound AI an intriguing long-term stock idea today. 10 stocks we like better than SoundHound AI › Sound and voice add an additional layer to artificial intelligence (AI) that often seems to fly under the radar. However, make no mistake about it, voice AI technology presents a massive opportunity and is crucial to delivering AI to real-world, consumer-facing applications. SoundHound AI (NASDAQ: SOUN) is among the leaders in this field, and its stock price has risen over 205% over the past three years, even as it still trades nearly 60% below its all-time high today. While the stock carries some risks, it's an AI powerhouse that could be just getting started. Here's why the stock could be a huge long-term winner, and why investors should consider buying and holding the shares today. There's a bit more nuance to voice AI technology than a text prompt. It has an additional layer, where a model must hear sound, then translate it into machine language with the proper meaning and context, before analyzing it. SoundHound AI was around long before the AI boom kicked off a few years ago. The company began in the automotive industry, where vehicle brands have used its voice AI for applications such as hands-free voice commands. Now, with the use cases rapidly expanding to include customer service agents, voice-based ordering, and others, the total addressable market is estimated to be $140 billion. However, the space is highly competitive. There are several other voice AI companies, including multiple "Magnificent Seven" companies, who have voice AI baked into their broader offerings. SoundHound AI may not be the largest player in the field, but it benefits from two distinct advantages. First, the company specializes in voice AI. Often, a company that eats, sleeps, and breathes a single thing is better than a massive company that does hundreds of different things. Focus can be a powerful tool. Apple's years-long struggles with its voice assistant, Siri, illustrate that size doesn't always translate to success. Second, SoundHound AI takes a neutral approach with its customers. It will white-label its technology, rather than force its logo on consumer-facing aspects of its customers' products and services. Its stance can make SoundHound AI a preferable partner for many brands, much like how The Trade Desk's independent platform appeals to brands in the digital advertising space. One of the hurdles for a promising company like SoundHound AI is expanding beyond that initial, successful market niche. Fortunately, the company is expanding beyond the automotive industry and gaining traction in new market segments. It acquired voice AI company Amelia last summer to expand its footprint and now works with some of the leading restaurants, hotels, gyms, and other consumer-facing businesses. Acquisitions always help juice growth, hence the big jump from $85 million in 2024 revenue to an estimated $159 million this year. Still, estimates for next year indicate roughly 27% revenue growth: SoundHound AI is clearly growing, and the broader demand for AI could continue to provide the necessary tailwinds to sustain that growth, as long as the company continues to win business. SoundHound AI's valuation is steep enough to make one pause. The stock trades at almost 25 times 2025 revenue estimates. That valuation isn't so high that it dooms the stock to underperform for years on end, but it does leave the company with a tighter margin for error. Growth must continue, and management must operate the business cleanly. But if the company delivers on its revenue estimates and sustains similar growth beyond next year, the stock can grow into and beyond its current price tag. SoundHound AI must continue to differentiate itself from larger competitors. That's not a given, which makes the stock a bit risky. Still, that's par for the course with most up-and-coming companies. If things go well, SoundHound AI's impressive voice AI technology and promising growth potential could yield lucrative rewards for investors over the coming years and beyond. 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 $687,731!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $945,846!* Now, it's worth noting Stock Advisor's total average return is 818% — a market-crushing outperformance compared to 175% 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 June 23, 2025 Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and The Trade Desk. The Motley Fool has a disclosure policy. This Artificial Intelligence (AI) Powerhouse Could Be Just Getting Started was originally published by The Motley Fool