SoundHound AI Stock Is Down 36% in 2025. Where Could It Be at the End of 2026?

Core Insights - SoundHound AI is experiencing significant business growth, particularly in conversational AI applications, but this growth has not been reflected in its stock price, which has dropped 36% in 2025 [2][11] - The company's revenue is rapidly increasing, with a reported $42 million in Q3 2025, marking a 68% year-over-year growth, although this is a deceleration from the previous quarter's 217% growth [7][8] - Despite the current high valuation, SoundHound's stock may be considered cheap based on future revenue forecasts, with Wall Street estimating $232.8 million in revenue for 2026, leading to a forward price-to-sales ratio of 21.2 [12][13] Business Demand and Product Offerings - SoundHound's AI products are in high demand across various industries, including hospitality and automotive, with notable clients like Krispy Kreme and Hyundai utilizing its technology [4][5] - The company's Dynamic Drive-Thru software and Amelia platform are examples of how its AI solutions are enhancing operational efficiency and customer service in real-time [6][4] Financial Performance and Projections - SoundHound's management has raised its full-year revenue forecast for 2025 to between $165 million and $180 million, indicating confidence in continued growth despite recent stock performance [8] - The company reported a net loss of $109.2 million in Q3 2025, but an adjusted loss of $13 million, highlighting the impact of one-off expenses and the need for careful cost management moving forward [9][10] Valuation Considerations - SoundHound's current price-to-sales ratio stands at 31.8, which is higher than that of established companies like Nvidia, raising questions about its valuation relative to its growth potential [11] - If SoundHound meets or exceeds revenue estimates for 2026, there is potential for a positive stock performance, possibly reversing the losses seen in 2025 [15]