Artificial intelligence (AI) has been a game-changer, propelling numerous tech companies to success. One such example is Soundhound AI, Inc. (SOUN), a company that has garnered significant investor attention due to its bold acquisition strategy and expanding presence in the speech and voice recognition market.
Earlier this year, Nvidia Corporation’s investment in SOUN caused a surge in the company’s shares, drawing the spotlight to its potential. Nvidia’s continued support, from a $75 million venture investment in 2017 to its role as a strategic investor during SOUN’s debut via a special purpose acquisition company (SPAC) in 2022, underscores the chip giant’s confidence in Soundhound’s trajectory.
About Soundhound AI Stock
Soundhound AI, Inc. (SOUN), based in California, is revolutionizing conversational intelligence with its state-of-the-art voice AI technology. The company’s lightning-fast and accurate solutions in various languages cater to industries like automotive, TV, and customer service. Soundhound’s innovative products such as Smart Answering and Dynamic Drive Thru, enhance user experiences, while its SoundHound Chat AI integrates generative AI for advanced voice assistance.
Boasting a market cap of approximately $1.6 billion, this sound recognition and voice assistant technology firm has impressed investors with its remarkable potential. Soundhound’s shares have surged by 104.6% over the past 52 weeks and 130.6% year-to-date, outperforming the broader S&P 500 Index.
Despite a 52% drop from its annual highs, SOUN stock is still valued at a rich 35.7 times sales, indicating that investors are willing to pay a premium for anticipated sales growth.
Soundhound Takes Off on Q2 Earnings, Amelia Acquisition
Soundhound’s shares surged over 21% on Aug. 8 following the company’s impressive Q2 earnings report and its acquisition of Amelia, an enterprise AI software company. The $80 million deal positions Soundhound to enhance its conversational AI capabilities, leveraging Amelia’s solutions in customer service and employee assistance across various industries.
Soundhound’s Q2 revenue of $13.5 million marked a substantial 54% year-over-year increase, driven by growing demand for voice and conversational AI. The quarter’s gross margin stood at 63%. While the company remains unprofitable, its adjusted loss per share in Q2 improved compared to the previous year, and Soundhound ended the quarter with a robust cash reserve of $201 million.
With the addition of Amelia’s revenue streams, Soundhound has raised its revenue outlook for fiscal 2024 and 2025, projecting revenue to surpass $80 million in 2024 and double to over $150 million in 2025.
What Do Analysts Expect for Soundhound Stock?
The strategic acquisition of Amelia has invigorated Wall Street’s interest in Soundhound, leading Cantor Fitzgerald to upgrade SOUN stock to “Overweight” with a new price target of $7, indicating potential upside. Analysts anticipate Soundhound’s loss to narrow significantly by fiscal 2025, reflecting confidence in the company’s growth prospects.
The average analyst price target of $7.58 implies a solid upside potential, with a high target of $9.50 suggesting even further gains. Soundhound continues to enjoy a consensus “Strong Buy” rating from analysts, underlining confidence in its performance.