SoundHound AI Has Been My Favorite Artificial Intelligence Stock in 2025. Here's Why I'm Not Changing Course in the Sell-Off.

Core Insights - SoundHound AI has experienced significant price fluctuations but remains a compelling investment opportunity due to its strong business fundamentals and growth potential [1][11]. Company Overview - SoundHound AI, originally known for its music identification apps, has evolved to develop AI tools for audio decoding, which have found applications in various industries [2][3]. - The company launched the Houndify system in 2016, leading to partnerships with global automakers and entertainment technology firms, and subsequently went public [4]. Business Development - SoundHound AI has secured a backlog of $1.2 billion in unfilled orders, representing a 75% increase year-over-year, indicating strong demand for its services [6]. - The company has established partnerships with notable clients, including Stellantis and restaurant management specialist Toast, expanding its market reach [5]. Stock Performance - The stock price of SoundHound AI saw a dramatic rise from $1.70 to $8.00 per share, influenced by an investment from Nvidia, but later experienced a decline [7][11]. - As of March 25, the stock was priced at $10.20 per share, down 49.4% year-to-date, but is now viewed as a more reasonable investment opportunity [11]. Market Dynamics - The stock became a target for short-sellers, with 33% of its publicly traded shares on loan, leading to a short-squeeze scenario that ultimately did not materialize as expected [8][10]. - The excessive price manipulation experienced in December has subsided, allowing for a more stable investment environment [12]. Investment Outlook - SoundHound AI is positioned as a practical application of AI technology across lucrative markets, making it a strong candidate for investment consideration [13].