Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 31 Jul, 25 | SOUN | Buy | USD 10.39 | USD 11.1 | USD 11.75 | 10 days | Closed |
37.12%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
SoundHound AI, Inc. develops independent voice artificial intelligence (AI) solutions that enables businesses across automotive, TV, and IoT, and to customer service industries to deliver high-quality conversational experiences to their customers. Its products include Houndify platform that offers a suite of Houndify tools to help brands build conversational voice assistants, such as Application Programming Interfaces (API) for text and voice queries, support for custom commands, extensive library of content domains, inclusive software development kit platforms, collaboration capabilities, diagnostic tools, and built-in analytics; SoundHound Chat AI that integrates with knowledge domains, pulling real-time data like weather, sports, stocks, flight status, and restaurants; and SoundHound Smart Answering is built to offer customer establishments custom AI-powered voice assistant. The company's products also include CaiNET software that uses machine learning to enhance how domains work together to handle queries; CaiLAN software that arbitrates responses so users get answers from the right domain; Dynamic Interaction a real-time, multimodal customer service interface; Smart Ordering which offers an easy-to-understand voice assistant for restaurants; Employee Assist; automatic speech recognition; natural language understanding; wake words; custom domains; text-to-speech; and embedded voice solutions. The company was founded in 2005 and is headquartered in Santa Clara, California.
GAAP Net Income: Turnaround from a net loss of USD 33.0 million to a net income of USD 129.9 million, a swing of approximately USD 163 million, driven by fair value gains on contingent liabilities
Revenue Growth: Revenue surged by 151%, from USD 11.6 million in Q1 2024 to USD 29.1 million in Q1 2025
Widened Adjusted EBITDA Loss: Non-GAAP adjusted EBITDA loss increased by 44%, from (USD 15.4 million) to (USD 22.2 million)
Decline in Gross Margin: GAAP gross margin fell from 59.7% in Q1 2024 to 36.5% in Q1 2025, a decrease of 23.2 percentage points
SoundHound's dependence on aggressive growth strategies and non-operating gains to offset continued operating losses and declining gross margins poses a risk to sustained profitability and valuation stability
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 10.39 | 9.3 | 11.1 | 11.75 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Strong Revenue Growth and Diversification in Q1 2025: SoundHound AI, Inc. reported robust revenue growth for the first quarter of 2025, with total revenue reaching USD 29.1 million—representing a 151% year-over-year increase compared to USD 11.6 million in Q1 2024. Notably, the company highlighted a diversified customer base, with no single customer accounting for more than 10% of total revenue in the quarter. This reflects SoundHound's expanding market presence across multiple industries and its ability to mitigate concentration risk.
Mixed Margin and Profitability Metrics: Despite the impressive revenue growth, the company’s gross margins experienced a decline. GAAP gross margin stood at 36.5% in Q1 2025, down from 59.7% in Q1 2024—a decrease of 23.2 percentage points. On a non-GAAP basis, gross margin dropped to 50.8% from 65.5%, indicating cost pressures despite higher top-line growth. The company reported a GAAP net income of USD 129.9 million, largely driven by a USD 176 million non-cash gain related to the fair value adjustment of acquisition-related contingent liabilities. However, on a non-GAAP basis, the company posted a net loss of USD 22.3 million.
Strategic Progress Across Industry Verticals: SoundHound continued to expand its footprint across several industries. In automotive, it strengthened its presence by collaborating with Tencent Intelligent Mobility and participating in NVIDIA GTC 2025. In the restaurant space, it broadened its partnership with one of the largest U.S. pizza chains, in addition to growing its reach through existing clients like Burger King UK and Five Guys. Healthcare engagements expanded through renewed or new contracts with multiple providers. The company also signed strategic pilots in retail, energy, IT, telecom, travel, and financial services sectors, reflecting its cross-industry applicability.
Innovation and Technology Platform Enhancements: The company made significant advancements in its AI capabilities. The unveiling of Amelia 7.0 introduced full Agentic AI with voice-enabled technology, capable of executing complex tasks and engaging in human-like conversations. SoundHound launched its next-generation restaurant AI platform and introduced an industry-first in-vehicle voice commerce solution at CES 2025. It also released a Brand Personalities feature within SoundHound Chat AI Automotive and continued to showcase its leadership at major industry events.
Financial Position and Liquidity: SoundHound remains in a strong liquidity position with USD 246 million in cash and cash equivalents as of March 31, 2025, and no outstanding debt. Net cash used in operating activities decreased year-over-year to USD 19.2 million from USD 21.9 million, while cash provided by financing activities stood at USD 67 million. The company reported a net increase in cash of USD 47.6 million for the quarter, although investing cash flows remained minimal at USD 0.2 million.
Business Outlook Remains Positive: For the full year 2025, SoundHound reaffirmed its revenue guidance in the range of USD 157 million to USD 177 million. This projection reflects management’s confidence in the company’s continued momentum across multiple sectors and geographies. The CFO noted that the company’s value proposition is gaining traction and driving outcome-based success across a growing addressable market.
Recognition and Strategic Partnerships: SoundHound continued to enhance its ecosystem through strategic alliances and industry recognition. The company partnered with Pindrop to integrate advanced voice security solutions and was named an “exemplary” market leader in AIOps by ISG Research. Furthermore, its collaboration with NVIDIA underscores its commitment to cutting-edge applications in voice AI and generative AI.
Technical Commentary:
SOUN’s stock price is currently near a key support zone following a minor correction, as evidenced by the falling trendline, signaling the potential for a short-term upward move. The 14-period RSI is below the midpoint but exhibits growing buying momentum, indicating a possible rally to the upside. Additionally, the stock has dipped below its 50-period Simple Moving Average but may recover those levels in the near term. Overall, these technical signals suggest a higher probability of further gains, provided the price stays above these critical support levels.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on SoundHound AI, (NASDAQ: SOUN) at the closing market price of USD 10.39, as on July 30, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Software - Application
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| SOUN SoundHound AI Inc |
-0.215 2.55% | 8.21 | - | - | 74.94 | 17.04 | 73.58 | -25.4189 |
| CRM Salesforce.com Inc |
-14.86 7.05% | 195.95 | 100.89 | 27.47 | 7.42 | 4.34 | 7.44 | 26.81 |
| SAPGF SAP SE |
-10.99 5.30% | 196.50 | 76.28 | 22.88 | 5.61 | 3.84 | 5.59 | 26.18 |
| SAP SAP SE ADR |
-9.86 4.76% | 197.37 | 75.80 | 22.37 | 5.62 | 3.75 | 5.51 | 25.79 |
| INTU Intuit Inc |
-53.08 10.90% | 434.04 | 55.56 | 32.68 | 11.28 | 10.07 | 11.62 | 40.11 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on July 31, 2025. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned has been achieved and is subject to the factors discussed above.
Note 4: StockNextt reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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