SoundHound AI (SOUN) Stock Jumps 10% on Friday as Vanguard Loads Up

TLDR

• Oppenheimer maintained its Perform rating on SoundHound AI (SOUN) following CES analyst meetings and product demonstrations
• The stock jumped 10% on Friday, trading at $11.75 with volume 38% above average
• SoundHound posted Q3 revenue of $42.05M, up 67.6% year-over-year, beating expectations but remaining unprofitable with -211% net margin
• Insiders sold roughly 493,000 shares over the past 90 days while institutional ownership stands at 19.3%
• Analyst consensus rates the stock “Moderate Buy” with an average price target of $16.07

SoundHound AI stock climbed 10% during Friday trading, closing at $11.75 after touching an intraday high of $12.31. Trading volume reached approximately 39.1 million shares, marking a 38% increase over the typical daily average of 28.4 million shares.

SoundHound AI, Inc., SOUN

The move came as Oppenheimer maintained its Perform rating on the voice AI company following analyst meetings and product demonstrations at CES. Analyst Brian Schwartz highlighted new agentic capabilities and platform differentiation that emerged from the meetings.

The analyst noted that SoundHound could become one of the fastest top-line growers in software by 2026. The company has demonstrated strong revenue growth momentum with a five-year revenue CAGR of 62%.

Strong Revenue Growth Masks Profitability Concerns

SoundHound’s most recent quarterly results showed revenue of $42.05 million, beating analyst expectations of $40.48 million. The 67.6% year-over-year growth represents continued expansion in the voice AI market.

The company reported an earnings per share loss of $0.03, which topped consensus estimates of a $0.09 loss. Despite beating expectations, SoundHound remains unprofitable with a negative net margin of approximately 211%.

The company maintains a healthy current ratio of 5.15 and holds more cash than debt on its balance sheet. Analysts forecast 98% sales growth for the current fiscal year.

SoundHound’s revenue growth over the last twelve months reached 120.5%. The company trades at $11.06, which sits above its calculated fair value.

Mixed Signals From Market Participants

Analyst sentiment remains cautiously optimistic with a “Moderate Buy” consensus rating. The average price target stands at $16.07, suggesting potential upside from current levels.

Two analysts rate the stock as Strong Buy, five assign Buy ratings, two issue Hold ratings, and one maintains a Sell rating. Piper Sandler recently decreased its price target from $15.00 to $11.00 while maintaining a neutral rating.

Insider activity tells a different story. Company insiders sold approximately 492,965 shares over the past 90 days. SVP Majid Emami sold 32,741 shares at $10.66 in late December.

CFO Nitesh Sharan sold 60,780 shares at $11.28 in December. These sales represented decreases of 5.79% and 3.44% in their respective positions.

Institutional ownership remains stable at 19.3% of outstanding shares. Vanguard Group increased its holdings by 16.4% during the third quarter, now owning 43.5 million shares worth approximately $699 million.

Geode Capital Management and State Street Corp also increased their positions during recent quarters. MIRAE ASSET GLOBAL ETFS HOLDINGS lifted its stake by 13.4% in the third quarter.

Despite the positive technology assessment, Oppenheimer cited current valuation and “risks to the durability of profitable growth” as reasons for maintaining its Perform rating. The stock trades at a high price-to-book multiple of 11.64.

The company’s 50-day moving average sits at $12.04, while the 200-day moving average stands at $13.48. SoundHound carries a market capitalization of $4.94 billion with a beta of 2.65.

Analysts don’t anticipate profitability this year. The company is forecast to post an EPS of -0.38 for the current year.

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