Core Viewpoint - The AI sector has seen significant valuation increases in 2024, but many companies, including those related to AI, have experienced price cuts recently, presenting a potential buying opportunity for investors looking to capitalize on growth in AI stocks [1]. Company Overview - SoundHound AI is a relatively small AI company specializing in sound applications, including voice communication for various daily activities [3]. - The company is currently under the radar for most investors but is experiencing rapid growth and has substantial upside potential compared to larger competitors [2]. Market Potential - SoundHound estimates its total addressable market to be around $140 billion, while its current market cap is under $4 billion, indicating significant growth potential [5]. - Despite competition from larger tech companies, SoundHound's early commercialization efforts have provided industry validation and real-world data to enhance its technology [5]. Competitive Landscape - While larger tech companies may eventually outpace SoundHound's technological capabilities, there remains ample opportunity for growth in niche areas that larger competitors may overlook [6]. - SoundHound's small size makes it a potential acquisition target if it achieves significant technological advancements [6]. Investment Opportunity - The recent pullback in AI stocks may have created a favorable short-term buying opportunity for SoundHound [7]. - Analysts project that SoundHound's sales will grow by 97% in 2025, exceeding 2024's estimates, indicating a strong growth trajectory [9]. - The company's stock price has dropped significantly, providing a chance to invest at a discount compared to last year's closing price [8][9].

[Part I](index=6&type=section&id=Part%20I) [Business Overview](index=6&type=section&id=Item%201.%20Business) SoundHound AI provides an independent Voice AI platform, leveraging proprietary technology and a three-pillar revenue model for conversational intelligence solutions [Company Overview & Strategy](index=6&type=section&id=Company%20Overview%20%26%20Strategy) SoundHound aims to integrate conversational intelligence into products, positioning Voice AI as the next computing disruption through its proprietary platform - SoundHound's mission is to voice-enable the world with conversational intelligence through an independent AI platform[17](index=17&type=chunk) - The company believes Voice AI will be the next major technology disruption, following the popularization of the keyboard/mouse and touch screens[22](index=22&type=chunk)[23](index=23&type=chunk) - The company's technology is protected by a significant intellectual property portfolio, with over **192 patents granted** and over **109 patents pending**[20](index=20&type=chunk) [Products and Technology](index=8&type=section&id=Products%20and%20Technology) The Houndify Voice AI platform features core innovations like Speech-to-Meaning® and Deep Meaning Understanding®, offering products such as Smart Ordering and Chat AI with flexible connectivity - The company's core technological innovations are Speech-to-Meaning®, Deep Meaning Understanding®, and Collective AI[46](index=46&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) - Key product offerings include Smart Ordering for restaurants, Dynamic Interaction for real-time responses, SoundHound Chat AI with integrated Generative AI, and Smart Answering for handling customer phone calls[51](index=51&type=chunk)[52](index=52&type=chunk)[54](index=54&type=chunk)[56](index=56&type=chunk) - The Houndify platform provides APIs, custom domains, and supports Edge (embedded), Cloud, and Hybrid connectivity options to ensure devices are always responsive[36](index=36&type=chunk)[65](index=65&type=chunk)[67](index=67&type=chunk) [Revenue Model and Market Position](index=11&type=section&id=Revenue%20Model%20and%20Market%20Position) SoundHound's three-pillar revenue model, including royalties, subscriptions, and monetization, differentiates it by offering customizable Voice AI solutions with client brand and data control - The company's three-pillar revenue model consists of: - **Royalties**: From voice-enabling products like cars and smart TVs[79](index=79&type=chunk) - **Subscription**: From voice-enabling services like customer service and food ordering[84](index=84&type=chunk) - **Monetization**: An ecosystem enabling transactions between voice-enabled products and services, with revenue sharing[79](index=79&type=chunk)[84](index=84&type=chunk) - SoundHound positions itself as a superior alternative to big tech competitors by allowing customers to maintain their brand, control the user experience, and access their data, avoiding brand "hijacking"[69](index=69&type=chunk)[74](index=74&type=chunk) [Human Capital and Operations](index=13&type=section&id=Human%20Capital%20and%20Operations) As of December 31, 2024, SoundHound employed 842 staff, focusing on R&D and leveraging a strong intellectual property portfolio with over 192 patents - As of December 31, 2024, the company had approximately **842 full-time employees**, with **54% in the U.S.** and **46% in international locations**[95](index=95&type=chunk) - The company's intellectual property portfolio includes over **192 granted patents** and over **109 pending patents** worldwide, with a significant focus on conversational monetization[91](index=91&type=chunk)[92](index=92&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including persistent net losses, intense competition, customer concentration, acquisition integration challenges, AI-related liabilities, and internal control weaknesses [Business and Financial Risks](index=15&type=section&id=Business%20and%20Financial%20Risks) SoundHound faces substantial net losses, customer concentration, intense market competition, and integration risks from recent acquisitions like SYNQ3 and Amelia - The company has a history of substantial net losses and negative operating cash flows and may never achieve or maintain profitability[106](index=106&type=chunk)[190](index=190&type=chunk) - Significant customer concentration exists: In 2024, one customer accounted for **14% of total revenues**; at the end of 2023, three customers accounted for **87% of consolidated accounts receivable**[128](index=128&type=chunk) - The acquisitions of SYNQ3 and Amelia subject the company to various risks, including integration challenges, potential write-downs of goodwill, and the possibility that the transactions may not be accretive[180](index=180&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) [Technology and Operational Risks](index=16&type=section&id=Technology%20and%20Operational%20Risks) Generative AI use, evolving regulations, reliance on third-party infrastructure, and intellectual property issues pose significant technology and operational risks - The use of generative AI creates risks of false or "hallucinatory" output, which could lead to reputational damage, legal liability, and competitive harm[110](index=110&type=chunk) - The business is subject to evolving AI regulations, such as the European Union's AI Act, which could impose additional costs and increase liability risk[114](index=114&type=chunk)[115](index=115&type=chunk) - The company relies on third-party data center hosting facilities and public clouds; interruptions or delays in these services could impair service delivery and harm the business[148](index=148&type=chunk) - The company faces risks of intellectual property infringement claims from third parties and the potential for unauthorized use of its own proprietary technology[209](index=209&type=chunk)[210](index=210&type=chunk) [Internal Control and Market Risks](index=34&type=section&id=Internal%20Control%20and%20Market%20Risks) Material weaknesses in internal controls, stock price volatility, and a dual-class stock structure concentrating voting power present significant internal control and market risks - The company identified material weaknesses in internal control over financial reporting as of December 31, 2024, related to the control environment, accounting for complex transactions, segregation of duties, and IT general controls[199](index=199&type=chunk)[201](index=201&type=chunk) - The dual-class common stock structure concentrates voting control with holders of Class B Common Stock, who have **ten votes per share**, limiting the ability of Class A stockholders to influence corporate matters[225](index=225&type=chunk)[226](index=226&type=chunk) - The company's ability to use its net operating loss carryforwards, which totaled **$548.4 million (federal)** and **$208.1 million (state)** as of December 31, 2024, may be limited[237](index=237&type=chunk) [Cybersecurity](index=43&type=section&id=Item%201C.%20Cybersecurity) SoundHound maintains a comprehensive cybersecurity program, overseen by its audit committee, which has not materially impacted business operations to date - Cybersecurity risk is managed by a dedicated Information Security Management committee and overseen by the board's audit committee[248](index=248&type=chunk)[249](index=249&type=chunk) - The risk management program includes regular assessments, employee training, continuous monitoring, and annual reviews of third-party vendors, including requiring SOC 1 or SOC 2 reports[244](index=244&type=chunk)[246](index=246&type=chunk) - To date, cybersecurity threats and breaches have not materially affected the company's business[242](index=242&type=chunk) [Properties and Legal Proceedings](index=45&type=section&id=Other%20Part%20I%20Items) The company's corporate headquarters is a leased facility in Santa Clara, California, and it is not currently involved in any material legal proceedings - The company's corporate headquarters is located in a **61,360 square-foot leased building** in Santa Clara, California, with the lease set to expire in 2026[254](index=254&type=chunk) - The company is not currently a party to any actions, claims, or legal proceedings expected to have a material adverse effect on its business or financial condition[99](index=99&type=chunk)[255](index=255&type=chunk) [Part II](index=46&type=section&id=Part%20II) [Market for Common Equity and Related Matters](index=46&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) SoundHound's Class A common stock and warrants trade on Nasdaq, with no anticipated cash dividends in the foreseeable future - The company's Class A common stock trades under the symbol "**SOUN**" and its redeemable warrants trade under "**SOUNW**" on the Nasdaq Global Market[259](index=259&type=chunk) - The company does not anticipate paying cash dividends in the foreseeable future[260](index=260&type=chunk) Equity Compensation Plan Information (in thousands) | Plan Category | Securities to be Issued Upon Exercise of Outstanding Options | Weighted Average Exercise Price of Outstanding Options | Granted Restricted Stock Awards Outstanding | Securities Remaining Available for Future Issuance | | :--- | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 5,926 | $4.44 | 23,654 | 11,216 | [Management's Discussion and Analysis (MD&A)](index=47&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In FY2024, revenue grew 85% to $84.7 million driven by acquisitions, though net loss widened to $350.7 million due to non-cash charges, while liquidity improved from equity offerings [Results of Operations](index=53&type=section&id=Results%20of%20Operations) FY2024 revenue increased 85% to $84.7 million, driven by service subscriptions, but net loss widened to $350.7 million due to non-cash charges, and gross margin declined Consolidated Results of Operations (in thousands) | | Year Ended December 31, 2024 | Year Ended December 31, 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $84,693 | $45,873 | $38,820 | 85% | | **Gross Profit** | $41,384 | $34,566 | $6,818 | 20% | | **Gross Margin** | 49% | 75% | - | (26)% | | **Loss from Operations** | $(341,353) | $(68,608) | $(272,745) | 398% | | **Net Loss** | $(350,681) | $(88,937) | $(261,744) | 294% | Revenue by Type (in thousands) | Revenue by Type | Year Ended December 31, 2024 | Year Ended December 31, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Service Subscriptions | $56,347 | $1,940 | 2804% | | Product royalties | $27,964 | $43,299 | (35)% | | Monetization | $382 | $634 | (40)% | | **Total** | **$84,693** | **$45,873** | **85%** | - The significant increase in net loss was primarily driven by a non-cash charge of **$222.7 million** related to the change in fair value of contingent acquisition liabilities, which is linked to the company's stock price movement[317](index=317&type=chunk)[326](index=326&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2024, SoundHound held $198.2 million in cash, bolstered by $407.3 million from equity offerings used to repay debt and fund operations - The company held **$198.2 million** in unrestricted cash and cash equivalents as of December 31, 2024[337](index=337&type=chunk) - During 2024, the company raised a total of **$407.3 million** in gross proceeds from three separate at-the-market (ATM) equity programs[340](index=340&type=chunk)[342](index=342&type=chunk)[370](index=370&type=chunk) - The company fully repaid its **$100.0 million Term Loan** in June 2024 and the remaining **$39.8 million** of assumed Amelia Debt in December 2024[373](index=373&type=chunk)[375](index=375&type=chunk) Cash Flow Activity (in thousands) | Cash Flow Activity | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(108,878) | $(68,265) | | Net cash used in investing activities | $(12,372) | $(392) | | Net cash provided by financing activities | $210,906 | $168,237 | [Acquisitions](index=49&type=section&id=Acquisitions) In 2024, SoundHound acquired SYNQ3 for $15.8 million and Amelia for $98.6 million, expanding its market presence and revenue, but increasing expenses and integration complexities - On January 3, 2024, the company acquired SYNQ3, a voice AI provider for the restaurant industry, for a total purchase consideration of **$15.8 million**[345](index=345&type=chunk)[562](index=562&type=chunk) - On August 6, 2024, the company acquired Amelia, an enterprise conversational AI company, for a preliminary purchase consideration of **$98.6 million**, including significant contingent earnout shares[289](index=289&type=chunk)[357](index=357&type=chunk)[358](index=358&type:chunk) Unaudited Pro Forma Financials (in thousands) | Unaudited Pro Forma Financials | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Revenue | $143,498 | $153,586 | | Net loss attributable to SoundHound AI, Inc. | $(374,469) | $(158,339) | [Critical Accounting Policies](index=64&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies involve significant judgment in revenue recognition, business combinations, goodwill valuation, and contingent consideration, impacting financial reporting - Key critical accounting policies include revenue recognition, business combinations, goodwill and intangible assets, and contingent consideration[391](index=391&type=chunk) - Revenue recognition follows the five-step model of ASC 606, with significant judgment applied to identifying performance obligations and determining their standalone selling prices (SSP)[392](index=392&type=chunk)[401](index=401&type=chunk) - Business combinations are accounted for using the acquisition method, requiring fair value estimates for assets acquired and liabilities assumed; contingent consideration is remeasured to fair value each reporting period, with changes recognized in the consolidated statements of operations[409](index=409&type=chunk)[411](index=411&type:chunk) [Financial Statements and Supplementary Data](index=69&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited financial statements for FY2024 and FY2023, with the auditor issuing an adverse opinion on internal controls due to material weaknesses, but an unqualified opinion on the financial statements [Consolidated Financial Statements](index=74&type=section&id=Consolidated%20Financial%20Statements) Audited financial statements show total assets of $554.0 million, total liabilities of $371.3 million, $84.7 million in revenue, and a $350.7 million net loss for FY2024 Consolidated Balance Sheet (in thousands) | Consolidated Balance Sheet | December 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $255,520 | $113,542 | | **Total Assets** | **$553,953** | **$151,122** | | Total Current Liabilities | $67,742 | $24,223 | | **Total Liabilities** | **$371,300** | **$122,954** | | **Total Stockholders' Equity** | **$182,653** | **$28,168** | Consolidated Statement of Operations (in thousands) | Consolidated Statement of Operations | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Revenues | $84,693 | $45,873 | | Loss from Operations | $(341,353) | $(68,608) | | Net Loss | $(350,681) | $(88,937) | | Net Loss Per Share (Basic & Diluted) | $(1.04) | $(0.40) | [Notes to Consolidated Financial Statements](index=82&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, acquisition accounting, revenue disaggregation, debt repayment, stock-based compensation, NOL carryforwards, and subsequent equity offerings - Details the purchase price allocation for the SYNQ3 and Amelia acquisitions, including goodwill of **$6.0 million** and **$95.7 million** respectively, and significant contingent earnout liabilities (Note 3)[571](index=571&type=chunk)[586](index=586&type:chunk) - The company fully repaid its **$100.0 million Term Loan** in June 2024 and the assumed Amelia Debt in December 2024, resulting in a total loss on extinguishment of debt of **$15.6 million** (Note 10)[666](index=666&type=chunk)[668](index=668&type=chunk)[330](index=330&type:chunk) - As of Dec 31, 2024, the company had U.S. federal net operating loss carryforwards of **$548.4 million** and state NOLs of **$208.1 million** (Note 19)[782](index=782&type=chunk) - Subsequent to year-end, in January and February 2025, the company sold **4,248,900 shares** under a new at-the-market equity program, raising **$67.7 million** in gross proceeds (Note 23)[800](index=800&type=chunk) [Controls and Procedures](index=133&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of December 31, 2024, due to material weaknesses in internal control, with a remediation plan underway - Management concluded that disclosure controls and procedures were not effective as of December 31, 2024[803](index=803&type=chunk) - Material weaknesses were identified in several areas: - Ineffective control environment and risk assessment[804](index=804&type=chunk) - Ineffective controls for identifying and accounting for non-routine, unusual, or complex transactions (e.g., financing, acquisitions)[805](index=805&type=chunk) - Ineffective controls to verify appropriate segregation of duties[805](index=805&type:chunk) - Ineffective IT general controls (user access, change management, computer operations)[805](index=805&type:chunk) - A remediation plan is in progress, including engaging a third party for risk assessment, implementing an automated Segregation of Duties tool, enhancing user access reviews, and hiring additional personnel with risk and control expertise[808](index=808&type=chunk)

Core Insights - Analysts have identified three AI stocks with significant upside potential, with price targets suggesting increases of 95% to 167% over the next year [4][10][16] Group 1: AI Market Overview - The rise of artificial intelligence (AI) has been a major catalyst for stock market growth, contributing to record highs in major indices like the Dow Jones, S&P 500, and Nasdaq [2] - PwC analysts forecast a 26% increase in global GDP by 2030 due to the impact of AI technology across various industries [3] Group 2: Nvidia - Nvidia is projected to have an implied upside of 95%, with a price target of $220 per share set by Rosenblatt analyst Hans Mosesmann [5] - The company's Hopper chip and Blackwell GPU architecture have generated $11 billion in sales during the fiscal fourth quarter, marking the fastest ramp of a new product in Nvidia's history [6] - Nvidia's CUDA toolkit has been crucial in maintaining customer loyalty, enabling developers to maximize GPU potential [7] - However, Nvidia faces increasing competition from both external rivals and internal customers developing their own AI chips, which could impact its market position [8] - Historical trends indicate that emerging technologies often face bubble-bursting events, raising concerns about Nvidia's reliance on its data center segment, which accounted for 88% of net sales last year [9] Group 3: SoundHound AI - SoundHound AI has an implied upside of 167%, with a price target of $26 per share predicted by H.C. Wainwright analyst Scott Buck [10] - The company aims to create an AI voice ecosystem, integrating voice technology in various industries, including next-generation vehicles and restaurants [11][12] - SoundHound AI is experiencing significant sales growth, with a forecast of 85% growth in 2024 and potential for sales to double [13] - Despite its growth, SoundHound AI is not yet profitable, with a net loss that nearly doubled in the fourth quarter and a significant increase in cash burn [14][15] Group 4: Upstart Holdings - Upstart Holdings is projected to have an implied upside of 105%, with a price target of $110 per share set by Mizuho's Dan Dolev [16] - The company utilizes AI and machine learning to streamline the loan-vetting process, partnering with over 100 banks and credit unions, and achieving 91% automation in its loans [17] - Upstart's platform has shown similar delinquency rates compared to traditional methods, allowing for a broader customer base without increasing risk [18] - Concerns exist regarding Upstart's performance during economic downturns, as its model has not been tested in such conditions [19] - The company's performance is also sensitive to monetary policy changes and interest rates, which could lead to stock volatility [20]

Core Viewpoint - Rosen Law Firm is investigating potential securities claims on behalf of shareholders of SoundHound AI, Inc. due to allegations of materially misleading business information issued by the company [1]. Group 1: Legal Action and Investor Rights - Investors who purchased SoundHound securities may be entitled to compensation through a class action lawsuit without any out-of-pocket fees, as the Rosen Law Firm is preparing to seek recovery of investor losses [2]. - To participate in the class action, investors can submit their information through the provided link or contact the firm directly [2]. Group 2: Company Financial Reporting Issues - On March 4, 2025, SoundHound filed a Notification of Late Filing with the SEC, indicating it would not be able to file its 10-K annual report for the fiscal year ended December 31, 2024, on time due to complexities in accounting for prior acquisitions [3]. - The Notification also revealed that SoundHound identified material weaknesses in its internal control over financial reporting, which persist as of December 31, 2024, and the company expects to file its Form 10-K by March 18, 2025 [3]. - Following this announcement, SoundHound's shares experienced a decline of 5.8% on March 4, 2025 [3]. Group 3: Rosen Law Firm's Credentials - The Rosen Law Firm emphasizes the importance of selecting qualified legal counsel with a successful track record in securities class actions, highlighting its own achievements in recovering significant amounts for investors [4]. - The firm has been recognized for its performance in securities class action settlements, including a record settlement against a Chinese company and being ranked among the top firms for securities class action settlements since 2013 [4].

Core Viewpoint - The current market conditions present a buying opportunity for SoundHound AI as its stock has declined significantly, making it more reasonably priced for long-term investors [2][12]. Company Overview - SoundHound AI has been an innovator in artificial intelligence since 2006, with its song-identification application leading to a substantial audio data repository and user satisfaction [3]. - The company has transitioned from song identification to a general-purpose voice assistant, finding applications in various business operations such as drive-thru ordering and in-car infotainment [4]. Market Position and Strategy - Management positions SoundHound AI as a market leader with value for advertisers, e-commerce merchants, app developers, and technology product creators, drawing inspiration from major tech companies like Alphabet, Amazon, Apple, and Microsoft [5][6]. - Although comparisons to these tech giants are ambitious, SoundHound AI is seen as at the beginning of a potentially lucrative growth trajectory [6]. Stock Performance and Valuation - The stock has experienced volatility, including a peak price of $24.23 per share due to speculative trading and short-selling activities, but has since retreated to single-digit territory [8][9]. - The price-to-sales ratio has decreased from 110.5 in late December to 40.6, indicating a more favorable valuation despite ongoing negative profits [10]. - The company has a backlog of $1.2 billion in multiyear contracts, which, under conservative assumptions, translates to a valuation of approximately 11 times annual contract values [11]. Growth Potential - Recent financial reports indicate that SoundHound AI's revenue more than doubled in the last quarter, supporting the company's sales growth promises and long-term market opportunity [11][12].

Group 1: AI Market Overview - Artificial intelligence (AI) has been a dominant narrative in financial markets for the past two years, yet pure-play AI stocks have not performed well since the start of the year due to many leading companies being private [1] - Nvidia has seen significant growth due to its advanced GPUs, while Vistra Corp has been a top performer in the S&P 500 in 2024, benefiting from increased data center demand [2] Group 2: SoundHound AI (NASDAQ: SOUN) - SoundHound AI has established a strong first-mover advantage in voice AI solutions, achieving an all-time high (ATH) price of $24.23 in late December, but has since experienced a significant price drop [4] - The company reported Q4 earnings on February 27, with earnings per share (EPS) and revenues exceeding analyst expectations, leading to a 17.48% surge in stock price from $9.21 to $10.82 [5] - Following profit-taking and a delay in filing its annual Form 10-K due to accounting complexities, the stock price fell to $9.40, reflecting a 52.64% loss year-to-date (YTD) [6][7] - Analysts remain optimistic, with a consensus rating of 'Moderate Buy' and an average price target of $15.80, indicating a potential 68% upside from current prices [8] Group 3: Snowflake (NYSE: SNOW) - Snowflake gained attention after its earnings call on February 26, which showed a double beat, although it experienced a 14% sequential reduction in earnings and a minor revenue growth decline [9][10] - The stock price dropped from $166.19 to $154.23 after a brief surge, effectively erasing all YTD gains, with a mere 0.96% increase since the start of the year [11] - Analysts are bullish on Snowflake, with 32 'Buy' ratings and an average price target of $213.06, suggesting a 36.67% upside from current prices [12] - Despite high valuation concerns, some analysts consider Snowflake undervalued based on free cash flow analysis, indicating that patience may be necessary for a more attractive entry point [13]

Core Viewpoint - SoundHound AI predicts its revenue will double in the next fiscal year, indicating significant growth potential and attracting investor interest [1][3]. Company Growth - SoundHound AI's revenue rose 101% to $34.5 million in Q4, projecting 2024 revenue at $84.7 million and 2025 sales between $157 million and $177 million [3]. - The company's revenue backlog is nearly $1.2 billion, up 75% year over year, suggesting sustained growth as new contracts are signed [4]. Financial Position - SoundHound is not currently profitable but aims to achieve adjusted profitability by the end of 2025, supported by $200 million in cash and no debt [5]. - The stock is currently valued at 41.2 times sales, which is considered expensive but justifiable given the projected revenue growth [7]. Market Dynamics - The stock's valuation has decreased recently but remains high, indicating potential volatility due to the company's rapid growth and premium valuation [6][8]. - The company is expected to maintain rapid growth beyond 2026, making it a long-term investment opportunity [9].

Company Overview - SoundHound AI has experienced significant stock volatility, rising sharply after Nvidia's investment but dropping 51% in 2025 due to Nvidia's divestment and high valuation [1][2][3] - DigitalOcean, with a market cap of $3.7 billion, is positioned to potentially surpass SoundHound's market cap due to its attractive valuation and strong growth in cloud-based AI services [5][11] Financial Performance - DigitalOcean's revenue for Q4 2024 increased by 13% year over year to $205 million, with earnings rising 11% to $0.49 per share [7] - DigitalOcean's average revenue per user (ARPU) grew 14% year over year in Q4, an acceleration from the previous year's 6% growth [8] Market Position and Growth Potential - DigitalOcean is currently trading at 5 times sales and 22 times forward earnings, making it a more attractive investment compared to SoundHound's 41 times sales [6][3] - DigitalOcean has launched the DigitalOcean GenAI Platform, which is in public beta and has already seen over 1,000 AI agents created, indicating strong demand for its AI services [9][10] Future Projections - DigitalOcean has guided for $880 million in revenue for 2025, a 13% increase from the previous year, with potential for higher growth due to demand for cloud-based AI services [11] - If DigitalOcean trades at 7.5 times sales, its market cap could reach $6.6 billion, surpassing SoundHound's market cap, which may struggle to grow due to its high valuation [12]

Core Viewpoint - Kirby McInerney LLP is investigating potential claims against SoundHound AI, Inc. regarding possible violations of federal securities laws and unlawful business practices [1]. Group 1: Investigation Details - The investigation focuses on whether SoundHound and/or its officers have engaged in unlawful business practices [1]. - The law firm is reaching out to individuals who purchased or acquired SoundHound securities for information related to the investigation [4]. Group 2: Financial Reporting Issues - On March 4, 2025, SoundHound filed a Notification of Late Filing with the SEC, indicating it would not file its 10-K annual report for the fiscal year ended December 31, 2024, on time [3]. - The company cited the complexity of accounting for prior acquisitions as a reason for the delay and identified material weaknesses in its internal control over financial reporting [3]. - SoundHound expects to file its Form 10-K by March 18, 2025, within the fifteen-day period allowed under Rule 12b-25 [3]. - Following this announcement, SoundHound's share price fell by $0.60, closing at $9.72 on March 4, 2025, down from $10.32 on March 3, 2025 [3].

After a strong 2024 for SoundHound AI (SOUN -5.91%), it's been a rough start to 2025. However, the stock rallied from its recent lows following a strong fourth-quarter earnings report. Shares have nearly doubled over the past year, as of this writing, but they're down 50% year to date.SoundHound popped up on investors' radar after chip giant Nvidia revealed an investment in the artificial intelligence (AI) company in Feb. 2024. However, the stock has tumbled the past few weeks following the news that Nvidia ...