 is an innovative leader in voice AI technology, providing solutions for a wide array of industries, including automotive, restaurants, and e-commerce.){kind=link}
SoundHound AI Inc. (NASDAQ: SOUN) is an innovative leader in voice AI technology, providing solutions for a wide array of industries, including automotive, restaurants, and e-commerce.
After a spectacular surge in 2024, the company’s stock performance has raised questions about its future trajectory in 2025.
With growing demand for AI-powered voice solutions, SoundHound’s prospects have piqued investor interest. In this article, we will dive into SoundHound’s performance in 2024, assess its start to 2025, and offer an analysis of whether the stock is a buy, sell, or hold for the year ahead.
Performance in 2024: An Explosive Year for SoundHound
2024 proved to be an extraordinary year for SoundHound AI Inc. The company’s stock price saw an explosive rise, increasing by more than 700% during the year.
This growth was fueled by multiple factors, including SoundHound’s strategic partnerships and the increasing demand for its cutting-edge voice AI technologies.
Notably, SoundHound’s AI solutions were deployed across various high-profile sectors such as automotive (where it integrated its voice technology into infotainment systems) and the restaurant industry (with its services being used in chains like Chipotle and Krispy Kreme).
The company’s technology enabled more efficient customer experiences, with automated voice systems taking over tasks such as taking orders and providing support.
As a result, SoundHound began to gain significant traction among major businesses looking to leverage AI for operational efficiency. Moreover, the backing from notable investors, including Nvidia, further validated SoundHound’s potential in the growing AI market, contributing to the sharp rise in stock price.
However, despite the impressive growth in stock price, SoundHound still faced challenges. The company reported net losses and remained unprofitable in 2023, which was a concern for investors looking for immediate returns.
Despite these losses, the company’s increasing revenue, up 47% year-over-year in 2023 to $45.87 million, showed a strong upward trajectory, indicating its future potential in the voice AI market.
The Start of 2025: Early Signs and Market Sentiment
As we entered 2025, SoundHound’s stock started the year on a slightly subdued note. Trading at $19.84 as of January 2, 2025, the stock had experienced a minor dip of around 12.57% from the previous closing price.
Despite the pullback, the overall sentiment surrounding SoundHound remains positive, with analysts still projecting future growth, albeit at a more conservative pace.
The market remains enthusiastic about SoundHound’s expansion into new sectors. The company continues to scale its AI technology into high-demand markets, including automotive infotainment systems, smart home applications, and even advanced customer service chatbots for businesses.
Moreover, the company’s partnership with automotive companies like Stellantis and Hyundai, as well as the deployment of its solutions in over 10,000 restaurant locations, paints a promising picture for SoundHound’s continued relevance and market share in the voice AI space.
However, there is an undeniable risk of market overvaluation, as the company’s stock price remains high relative to its earnings and sales.
Analysts have set a 12-month target price of $8.10, suggesting that the stock may face a potential downside of 13% from its current value. This caution stems from the company’s inability to turn a profit, the volatility in its stock price, and its reliance on scaling its technology to meet investor expectations.
SoundHound in 2025: Is It a Buy, Sell, or Hold?
Buy: A High-Risk, High-Reward Proposition
SoundHound presents a compelling “buy” opportunity for investors with a high-risk tolerance, especially those with a strong belief in the growth potential of AI and voice technology.
The company is well-positioned in a booming sector, with voice AI continuing to be adopted across industries. Its strong partnerships and expanding customer base could provide significant growth in the years to come.
For investors who are willing to weather short-term volatility in exchange for the potential of significant long-term gains, SoundHound’s stock remains an attractive option.
Sell: Caution Advised Amid Volatility
On the flip side, SoundHound’s stock is at a high valuation relative to its financial performance. The company continues to operate at a loss, and there are concerns about whether it can scale efficiently enough to reach profitability.
While the company has made strides, it is not yet clear when or if it will transition into profitability.
This could lead to a decline in investor confidence, particularly if the market corrects or if SoundHound’s expansion doesn’t meet expectations. For more conservative investors who prioritize stability and profitability over growth potential, it may be wise to consider selling or avoiding the stock.
Hold: A Balanced Approach
For investors who are already holding SoundHound stock, maintaining a “hold” position could be the most prudent strategy for 2025.
The company’s future prospects remain solid, but it’s clear that the stock is overvalued at current levels. Investors should monitor the company’s ability to scale, generate consistent revenue growth, and make inroads into new markets.
If the stock experiences a price correction, it could offer a better entry point. Moreover, investors should keep an eye on quarterly earnings reports, particularly for signs of improved profitability, which could further boost investor confidence and the stock price.
Conclusion: Assessing SoundHound’s Future
SoundHound AI Inc. has made an impressive leap forward in 2024, with its stock price soaring as demand for voice AI technology surged.
The company’s strategic moves into various high-growth industries, combined with its partnerships and investor backing, suggest that SoundHound has strong potential in the long term.
However, concerns about overvaluation, profitability, and the volatility of the AI sector mean that the stock presents both high rewards and high risks.
For 2025, SoundHound is best suited for investors who are comfortable with volatility and optimistic about the future of AI technology.
Given its high valuation and lack of profitability, the stock might be better suited for a “hold” or “buy” position for long-term growth enthusiasts. But for those seeking a safer, more stable investment, SoundHound may be a “sell” or “avoid” in the short term.
Ultimately, whether SoundHound is a buy, sell, or hold depends on your investment strategy, risk tolerance, and belief in the company’s ability to leverage its technological advances to achieve sustained profitability.
Keep a close eye on the company’s performance as 2025 progresses, and be prepared for both potential upsides and market corrections.
Also Read
Why Sirius XM Stock is Worth Buying in 2025: A Strategic Investment Perspective
Palantir Stock Performance in Early 2025: A Snapshot