SoundHound AI, Inc. (NASDAQ:SOUN) is one of the AI Stocks Analysts are Tracking Closely. On November 18, DA Davidson reiterated its Buy rating and $17.00 price target on the stock following a day of investor meetings with SoundHound’s CFO Nitesh Sharan. The firm is constructive on SoundHound, citing stronger visibility and confidence in its strategic roadmap. From gaining insights on why the company acquired Interactions to learning details about the economics of SoundHound’s developing voice commerce bus ...

Core Insights - Many popular stocks have experienced significant declines, creating potential rebound opportunities for investors [1] - A scan identified several oversold stocks with low relative strength index (RSI) values, indicating they may be primed for recovery [2] Oversold Stocks Analysis - MARA Holdings, Inc. (NASDAQ:MARA) has an RSI of 22.95 and has dropped over 40% in the past month, making it a top candidate for recovery [2] - CoreWeave, Inc. (NASDAQ:CRWV) has an RSI of 23.20 and is linked to NVIDIA Corp. (NASDAQ:NVDA), which may provide a supportive catalyst [5] - Webull Corp. (NASDAQ:BULL) has an RSI of 24.06 and has seen a decline of more than 25% in the last month, with upcoming earnings potentially acting as a catalyst [5] - Super Micro Computer, Inc. (NASDAQ:SMCI) has an RSI of 27.77 and has decreased by 35% over the past month, indicating potential for a reversal [5] - SoundHound AI, Inc. (NASDAQ:SOUN) has an RSI of 28.08 and has dropped 40% from its mid-October highs, suggesting it may be undervalued [5] - CleanSpark, Inc. (NASDAQ:CLSK) has an RSI of 28.15, while Hims & Hers Health, Inc. (NYSE:HIMS) has an RSI of 28.84 [5] - Chipotle Mexican Grill, Inc. (NYSE:CMG) and Oracle Corp. (NYSE:ORCL) both have RSIs of 28.84 and 29.14 respectively, indicating they are also in oversold territory [5] - NuScale Power Corp. (NYSE:SMR) has an RSI of 29.49, rounding out the list of oversold stocks [5] Investment Considerations - Stocks with very low RSI values may present attractive opportunities for quick rebounds, but investors should use additional indicators to confirm potential reversals [5]

Core Insights - SoundHound AI (SOUN) is rapidly expanding in the conversational and agentic AI space, supported by a strong balance sheet with $269 million in cash and no debt, allowing for significant investment in AI infrastructure and model development [1][10] Financial Performance - The company reported record third-quarter revenues of $42 million, representing a 68% year-over-year increase, driven by adoption across various sectors including enterprise, automotive, restaurants, and IoT [2][10] - SoundHound's robust cash position enables it to fund the rapid rollout of its platforms, including Amelia 7.3, Vision AI, and the Polaris multimodal foundation model [2][10] Strategic Acquisitions - The acquisition of Interactions enhances SoundHound's enterprise penetration and adds Fortune 100 clients, allowing for better integration and upgrades of acquired platforms using in-house models [3][10] Growth Strategy - The company is investing in channel expansion, global deployments, and agentic automation, which are expected to generate long-term recurring revenue [4] - Management anticipates approaching breakeven by the end of 2025, supported by cost synergies and continued growth, facilitated by its cash reserves [5] Competitive Landscape - SoundHound faces competition from C3.ai and Cerence, both of which are expanding their capabilities in conversational AI [6][7] - C3.ai is focusing on enterprise AI automation, while Cerence is strengthening its automotive AI presence, making both companies significant competitors in the market [6][7][8] Valuation Metrics - SoundHound's forward 12-month price-to-sales ratio is 21.85, higher than the industry's 16.49, indicating a premium valuation [13] - The Zacks Consensus Estimate for SOUN's 2025 loss per share remains at 13 cents, showing improvement from a loss of $1.04 per share in the previous year [13]

Core Insights - AI stocks are experiencing significant growth, driven by substantial investments in AI data centers projected to reach $4 trillion by 2030 [1] - Software companies are also benefiting from increased demand for AI services, enhancing productivity and cost savings [1] Company Analysis: SoundHound AI - SoundHound AI's share price has surged by 87% over the past year, attributed to its advanced conversational AI technology used by various industries, including Chipotle and Hyundai [2][3] - The company reported a 68% revenue increase in Q3, reaching $42 million, surpassing Wall Street's estimate of $40 million [4] - SoundHound narrowed its non-GAAP loss per share to $0.03, better than the expected loss of $0.04, contributing to its stock price surge [5] Company Analysis: Taiwan Semiconductor - Taiwan Semiconductor's share price increased by 44% over the past year, benefiting from tech giants' investments in AI data centers [2] - The company reported a 30% revenue increase in Q3, totaling $33.1 billion, with earnings rising 39% to $2.92 per ADR [7] - TSMC holds a dominant position, manufacturing about 90% of advanced processors, positioning it well to benefit from the projected $4 trillion in data center spending [8] Investment Comparison - SoundHound's stock is considered risky due to its unprofitability and a high price-to-sales ratio of 53, significantly above the software industry average of over 4 [10] - In contrast, Taiwan Semiconductor is profitable with a price-to-earnings ratio of 32, aligning closely with the S&P 500 average and lower than the tech industry average of about 48 [10] - The current profitability and reasonable valuation of Taiwan Semiconductor make it a more attractive investment compared to SoundHound [11]

Core Insights - SoundHound AI, Inc. reported a strong third-quarter 2025 performance with a 68% year-over-year revenue growth, raising its full-year outlook, yet the stock experienced a 7% decline post-earnings, underperforming the industry and broader market [1][9][22] Financial Performance - The company achieved third-quarter revenues of $42 million, marking a 68% increase year-over-year, driven by growth in enterprise AI, restaurants, automotive, IoT, and financial services [9][12] - SoundHound ended the quarter with $269 million in cash and no debt, providing flexibility for future investments [13] - Non-GAAP net loss narrowed to $13 million, with an adjusted EBITDA loss of $14.5 million, while non-GAAP gross margin improved to 59% [14] Growth Prospects - The company is experiencing strong enterprise demand across various sectors, including healthcare, financial services, and telecom, with significant multi-year deals [12] - SoundHound's proprietary Polaris speech foundation model is enhancing product performance and supporting margin expansion [11] - Analysts project revenues to nearly double in 2025 and grow about 39% in 2026, reflecting expectations of scaling and margin gains [15] Valuation - SoundHound trades at a forward 12-month P/S ratio of 26, significantly higher than the industry average of 16.67, indicating strong revenue growth expectations and market optimism [6][21] - Despite the premium valuation, the company's rapid growth and increasing market share could justify the current price [21] Competitive Landscape - SoundHound faces competition from major players like Nuance Communications, Verint Systems, and LivePerson, but its proprietary technology provides a competitive edge in accuracy and deployment flexibility [25] - The company is expanding into Voice Commerce, with commercial rollouts expected to begin in 2026 [12][26] Market Sentiment - The recent 7% decline in stock price reflects investor concerns over near-term challenges, including weakness in the automotive sector and rising operating costs due to acquisitions [22][23] - The stock's current setup suggests that investors may want to wait for clearer signs of profitability and market stability before making significant investments [29]

Core Insights - SoundHound AI's stock has experienced volatility, with an 88% increase over the past year but a nearly 32% decline year to date, despite strong revenue growth and positive guidance [1] Revenue Performance - SoundHound's revenue grew by 68% year-over-year to $42 million, surpassing the analyst consensus of $32.9 million [2] Financial Metrics - The adjusted net loss improved from $0.04 per share to $0.03 per share, while adjusted EBITDA loss decreased from $15.9 million to $14.5 million year-over-year [3] - The company reported an operating cash outflow of $32.8 million for the quarter and $71 million for the first nine months of the year [3] Gross Margins - GAAP gross margins fell 600 basis points year-over-year from 48.6% to 42.6%, but improved from 39% in Q2 [4] - Adjusted gross margins decreased by 40 basis points year-over-year to 59.2%, yet improved from 58.4% in Q2 [4] - The pressure on GAAP gross margins is attributed to noncash amortization from the acquisition of Amelia, with adjusted gross margins reflecting ongoing operations [5] Strategic Initiatives - The company is shifting towards an outcome-based pricing model in sectors like healthcare and hospitality to enhance growth and improve gross margins [7] - SoundHound is upgrading customers to its new Amelia 7 platform, expecting three-quarters of its customer base to transition by mid-2026 [8] - The company is exploring partnerships with smart TV manufacturers for voice ordering integration and has partnered with technology distributors to expand in the enterprise space [8]

Financial Performance - Total revenues for Q3 2025 reached $42,049,000, a 67.5% increase from $25,094,000 in Q3 2024[16] - The net loss for Q3 2025 was $109,271,000, compared to a net loss of $21,751,000 in Q3 2024, indicating a worsening financial position[16] - Net loss for the nine months ended September 30, 2025, was $54,063,000, a decrease from the net loss of $92,082,000 for the same period in 2024, representing a 41.2% improvement[24] - Revenue for the three months ended September 30, 2025, was $52,472 thousand, while for the nine months it was $156,642 thousand[103] - Net loss attributable to SoundHound AI, Inc. for the three months ended September 30, 2025, was $(104,443) thousand, and for the nine months it was $(47,772) thousand[103] Expenses and Costs - Operating expenses for Q3 2025 totaled $157,940,000, compared to $58,861,000 in Q3 2024, reflecting a significant increase in costs[16] - Research and development expenses for the nine months ended September 30, 2025, were $73,409,000, compared to $50,161,000 for the same period in 2024, reflecting increased investment in innovation[16] - Stock-based compensation increased to $60,956,000 for the nine months ended September 30, 2025, compared to $23,292,000 in 2024, representing a significant increase of 162.5%[24] - The company reported a depreciation and amortization expense of $24,086,000 for the nine months ended September 30, 2025, compared to $8,115,000 in 2024, indicating an increase of 196.5%[24] - Cash flows used in operating activities totaled $76,336,000 for the nine months ended September 30, 2025, compared to $75,755,000 for the same period in 2024, indicating a slight increase in cash outflow[24] Assets and Equity - Cash and cash equivalents increased to $268,936,000 as of September 30, 2025, up from $198,240,000 at the end of 2024[15] - Total assets grew to $702,217,000 as of September 30, 2025, compared to $553,953,000 at the end of 2024[15] - The company’s total stockholders' equity increased to $399,236,000 as of September 30, 2025, from $182,653,000 at the end of 2024[15] - The company reported a cumulative deficit of $997,123,000 as of September 30, 2025, up from $943,060,000 at the end of 2024[15] Acquisitions and Investments - The company completed the acquisition of Synq3, Inc. on January 3, 2024, and Amelia Holdings, Inc. on August 6, 2024, as part of its strategy to expand its technology capabilities[29] - The Company acquired SYNQ3 for a total purchase consideration of $15.8 million, which includes $3.9 million in cash and 5,755,910 shares of Class A Common Stock[56] - The Amelia Acquisition was completed for a total purchase consideration of $98.6 million, including 3,809,520 shares of Class A Common Stock and $8.4 million in cash for seller transaction expenses[71] - The Company expects to expand its market reach into new industries such as healthcare, insurance, financial services, energy, and retail through the Amelia Acquisition[70] - The acquisition of Interactions is expected to enhance SoundHound's leadership in Agentic AI and expand its customer portfolio across various industries[82] Revenue Sources - Hosted services revenue for the three months ended September 30, 2025, was $27,673 thousand, an increase from $17,546 thousand in the same period of 2024[124] - Licensing revenue for the three months ended September 30, 2025, was $10,403 thousand, compared to $4,619 thousand in the same period of 2024[124] - Professional services revenue recognized over time for the three months ended September 30, 2025, was $3,859 thousand, up from $2,851 thousand in the same period of 2024[117] - Service subscriptions generated $33.932 million in revenue for the three months ended September 30, 2025, up 78.5% from $19.029 million in 2024[128] Stock and Financing - The Company raised approximately $25.0 million by issuing 835,011 shares of Series A Convertible Preferred Stock at an issuance price of $30.00 per share between January 18 and January 20, 2023[165] - The Company sold 13,913,014 shares of common stock under the Second Equity Distribution Agreement at an average price of $14.48 per share, raising $201.5 million of gross proceeds during the nine months ended September 30, 2025[185] - The Company had a remaining capacity to sell up to an additional $48.5 million of its common stock under the Second Equity Distribution Agreement as of September 30, 2025[185] - The company entered into a Senior Secured Term Loan Credit Agreement for up to $100 million, with an additional $25 million available under certain conditions[159] Legal and Compliance - The company intends to vigorously defend against patent infringement allegations filed by VB Assets, LLC, with no reasonable estimate of loss available as of September 30, 2025[144] - The company recorded a liability of $4.1 million for potential sales tax exposure as of September 30, 2025, compared to $3.1 million as of December 31, 2024[149] - The company intends to file a motion to dismiss a class action complaint by December 12, 2025, and believes the claims lack merit[145] Tax and Regulatory Changes - The effective tax rate for the three months ended September 30, 2025, was -0.42%, contrasting with 32.54% for the same period in 2024[211] - The enactment of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, allows for immediate expensing of certain R&D expenses, although its impact on the financial statements was immaterial for the three and nine months ended September 30, 2025[212]

Core Insights - SoundHound AI, Inc. (SOUN) reported a record quarter with a 68% year-over-year revenue increase to $42 million, driven by growth in automotive, restaurant, and enterprise sectors, leading to an upward revision of full-year revenue guidance to $165–$180 million [1][10] Financial Performance - Non-GAAP gross margin improved to 59%, up from 42.6% on a GAAP basis, supported by in-house model migration and cloud efficiencies [2] - Adjusted EBITDA loss narrowed by 8% sequentially to $14.5 million, with a non-GAAP net loss per share of 3 cents, indicating progress towards breakeven by 2026 [2] - The company holds $269 million in cash with no debt, allowing for sustained R&D investment and potential M&A opportunities [2] Strategic Positioning - SoundHound is enhancing its technology moat through its proprietary Polaris foundation model and Amelia platform, integrating deterministic automation with generative AI for efficient deployments [3] - The company is expanding its enterprise client base, including new Fortune 100 customers and early-stage Voice Commerce pilots, indicating significant monetization potential [3] Competitive Landscape - As SoundHound focuses on profitability, it faces competition from Palantir Technologies and C3.ai, both of which are rapidly scaling in adjacent markets [5][6] - SoundHound's scalable licensing model offers faster deployments compared to Palantir's deep integration contracts, positioning it favorably in the enterprise AI ecosystem [7] Market Performance - SoundHound shares have increased by 28.5% over the past six months, outperforming the Zacks Computers - IT Services industry, which declined by 11.3% [8] - The forward 12-month price-to-sales ratio for SOUN is 27.84, significantly higher than the industry's 16.65 [12] Earnings Estimates - The Zacks Consensus Estimate for SOUN's 2025 loss per share remains unchanged at 13 cents, showing improvement from a loss of $1.04 per share in the previous year [14]

Company Overview - SoundHound AI Inc is an innovator in conversational intelligence, providing an independent Voice AI platform that enhances customer interactions across various industries such as retail, financial services, healthcare, automotive, smart devices, and restaurants [10][11] Current Market Sentiment - Recent options trading indicates a bearish sentiment among large investors, with 44% of trades being bearish compared to 11% bullish [1] - The average target price from industry analysts is $20.5, with one maintaining a Neutral rating at a price target of $15 and another holding a Buy rating with a target of $26 [12][13] Options Trading Insights - The average open interest for SoundHound AI options is 3,591.78, with a total volume of 2,532.00, indicating significant trading activity [3] - Whales have targeted a price range of $13.0 to $35.0 for SoundHound AI over the last three months, reflecting their expectations for the stock's movement [2] Recent Trading Activity - The largest observed options trades include bearish puts and neutral calls, with total trade prices of $95.5K and $53.6K for puts, and $40.9K and $36.4K for calls [9] - The stock price of SoundHound AI is currently at $14.95, reflecting a 5.73% increase, with a trading volume of 17,219,304 [15]

Core Viewpoint - The U.S. stock market saw strong performance in AI application stocks on Monday, indicating a positive trend in this sector [2] Group 1: Stock Performance - Applovin (APP.US) experienced an increase of over 8% [2] - Palantir (PLTR.US) and Unity Software (U.US) both rose by more than 6% [2] - SoundHound AI (SOUN.US) and Tempus AI (TEM.US) saw gains exceeding 3% [2]