SoundHound AI (NASDAQ: SOUN) is experiencing a resurgence after its Q4 earnings report, which saw shares nearly double over the past year. Despite a 50% decline year-to-date, the company’s revenue soared to $34.5 million, more than doubling from last year.
The recent rally was sparked by Nvidia’s investment in SoundHound in February 2024, but the stock has since declined due to the chip giant exiting its position. However, the latest earnings report suggests that SoundHound is still growing rapidly, with a cumulative subscriptions and bookings backlog of $1.2 billion, up over 75% from last year.
The company’s automotive segment saw double-digit unit price expansion, but was hurt by macroeconomic factors in the auto industry. In contrast, the restaurant vertical saw increasing adoption of AI customer-service solutions, with Burger King recently going live with SoundHound’s solutions in the UK.
SoundHound also made significant wins in new industries, including healthcare and utility sectors, thanks to its Amelia acquisition. The company has raised its full-year revenue outlook for 2025, now expecting $157 million to $177 million, up from a prior forecast of $155 million to $175 million.
While the stock’s valuation is still elevated at 26 times the consensus analyst estimate for 2025, SoundHound has significant opportunities ahead. The company is building and testing agentic AI use cases across its major verticals, which could be a game-changer in the rapidly evolving AI market.
However, investors should exercise caution due to the stock’s speculative growth profile and uncertain market outcomes. A pullback may still be warranted before considering a buy-in, making this an opportunity for those who missed the boat in the past.
Source: https://finance.yahoo.com/news/soundhound-shares-rally-revenue-soars-100000598.html