SoundHound stock shot up about 15% on Monday, after they posted better-than-expected Q2 results and raised their revenue forecast for the year.
The company now expects to bring in between $160 million and $178 million in 2025, showing strong momentum, especially in AI.
Shares started the day near $13.64 and climbed to around $16.03 before settling back a bit near $15.66 at press time.
Investors were clearly encouraged by the narrower losses and good revenue growth, plus a healthy gross margin of about 44%.
But the company still isn’t profitable yet, the pretax profit margin sits deep in the red at about -226%, mostly because they’re investing heavily in growth and development.
What’s driving SoundHound stock?
SoundHound stock big jump came after a standout Q2 earnings, with revenue soaring 217% from a year earlier to $42.7 million, way ahead of what analysts had expected.
The growth spanned all its key areas: automotive AI, enterprise customer service, and AI-powered automation for restaurants.
Riding that wave, the company raised its 2025 revenue forecast to between $160 million and $178 million, showing clear confidence in its expanding market reach.
CEO Keyvan Mohajer credited smart moves and new partnerships for the strong quarter.
One highlight was sealing major automotive deals, including integrating its voice assistant with a leading global carmaker in China, which significantly expands its footprint in the auto sector.
The launch of Vision AI, which blends voice and visual recognition, is opening up fresh opportunities. Plus, SoundHound’s growing presence in restaurant chains and other industries is building a promising pipeline for AI adoption ahead.
What analysts say?
Most analysts are pretty positive on SoundHound AI but are keeping a cautious eye on its high valuation after the recent price jump.
Wedbush gave the stock a boost by upgrading it, calling SoundHound a “hidden gem” in the AI space, which helped send shares up about 26% recently.
They are impressed by the company’s growing revenue and solid deals in the automotive sector.
That said, some folks worry the stock’s price-to-sales ratio around 40.7 is really high compared to broader markets like the S&P 500.
That premium comes with risks. Even though SoundHound’s revenue grew a whopping 217% last quarter, profitability is still weak.
So, there’s some question about how the stock will fare if the economy hits a rough patch, especially since the company is still running losses.
SoundHound looks like it’s on a good growth path and seems financially stable for now. But these fast-moving AI stocks can swing a lot, so it’s smart for cautious folks to spread their bets across different investments.
If you’re the type to take more risks, though, SoundHound’s new tech and plans might offer some nice upside. Just keep in mind, it’s not a smooth ride for everyone.
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