SoundHound AI Plunged 35% In 2025 - Is It Still Worth Owning? - SoundHound AI (NASDAQ:SOUN)

SoundHound AI SOUN stock is soaring on Tuesday. However, the stock plunged over 35% year-to-date.

What Contributed The Decline

On February 14, the stock tumbled 27% after Nvidia Corp NVDA disclosed that it had dissolved its stake in the company. Nvidia’s exit casts doubt on SoundHound AI’s future growth and stability.

As a key AI player, Nvidia likely gave other investors confidence through its backing.

On March 26, CNBC’s Jim Cramer recommended selling SoundHound AI, dismissing it as a complete meme stock.

Also Read: SoundHound AI Integrates NVIDIA’s Software To Accelerate Voice AI Technologies

Retail investors on social media hype up meme stocks, which often have compelling stories that drive their popularity. GameStop and AMC Entertainment Holdings rank among the most well-known examples.

On May 8, the conversational AI company reported first-quarter revenue of $29.13 million, up 151% year over year, missing analyst estimates of $30.38 million. The stock lost close to 4% in value after the results.

SoundHound AI reaffirmed its full-year 2025 revenue guidance of $157 million-$177 million versus estimates of $166.17 million.

Potential Rivals

As per a June 27 report, Meta Platforms META is exploring acquiring voice-cloning startup PlayAI to strengthen its push into conversational AI and build a superintelligence lab.

Meanwhile, OpenAI enhanced ChatGPT’s voice assistant in March, making it more natural and engaging as competition in the AI voice space heats up.

Wedbush’s Daniel Ives expects Apple Inc AAPL to enter the conversational AI space by acquiring Perplexity AI to boost search capabilities and stay competitive.

They urge Apple to move beyond its cautious approach, citing growing pressure from rivals like OpenAI, Alphabet Inc GOOGL Google, and Microsoft Corp MSFT.

Analyst Opinion

Eight analysts have set a consensus price forecast of $10.50 for SoundHound AI. HC Wainwright gave the highest forecast at $18 on May 12, 2025.

The latest ratings from Piper Sandler (May 27), HC Wainwright & Co. (May 12), and Wedbush (May 9) average a $15 target, suggesting a potential upside of 13.85% for the stock.

H.C. Wainwright analyst Scott Buck noted a growing customer base across sectors and 13,000+ restaurant locations as signs of strong business diversification.

According to the analyst, SoundHound AI’s restaurant segment could generate over $31 million in annual recurring revenue, with room to expand in 2025. He said gross margins will likely improve toward 70% over time despite short-term declines due to recent acquisitions.

Buck added that SoundHound AI’s $246 million in cash and no debt give the company flexibility for strategic M&A and organic growth opportunities.

Buck now projects SoundHound AI will generate $164 million in revenue for 2025, down from his earlier $170 million estimate but still within the company’s $157 million–$177 million guidance range.

He forecasts an adjusted EBITDA loss of $50.4 million for the year, including a $0.9 million profit in Q4, marking a key turning point for the business.

For 2026, Buck expects revenue to rise 34.1% to $220 million, with the adjusted EBITDA loss narrowing to $26.1 million. He anticipates greater visibility as the company scales in the coming quarters.

On June 19, Wedbush’s Dan Ives included SoundHound AI in his new ETF, calling it one of the overlooked names poised to benefit from the AI revolution. He noted that investors undervalue AI’s long-term growth and that focusing only on valuation risks misses transformative tech stocks like SoundHound.

Price Action: SOUN shares traded higher by 13.2% at $12.87 at the last check Tuesday.

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