Key Points
SoundHound is a growth stock with a lot of potential.
It's positioning itself aggressively to be a leader in the AI agent space.
Its potential acquisition of LivePerson could significantly accelerate revenue growth, but the deal also comes with plenty of risks.
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When SoundHound AI (NASDAQ: SOUN) reported its 2026 first-quarter results, the artificial intelligence (AI) voice company reported revenue surged 52% to $44.2 million. What investors soon found out was that not only was it not enough to move the stock price, but shares also slid.
SoundHound didn't raise its full-year 2026 revenue outlook, and markets seemed worried about its pending acquisition of LivePerson in an all-stock deal valued at $43 million. Still, one number in that report seemed largely dismissed: $100 million.
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Why the LivePerson acquisition makes sense
SoundHound's business is based on turning conversational interactions into actions. For example, with its voice-enabled AI inside a vehicle, you can place a hands-free dinner order for pickup while driving home from work.
Those voice-enabled use cases are expanding, as are the contracts SoundHound is landing. Its client base includes Stellantis, White Castle, Chipotle Mexican Grill, and several other well-known companies.
What SoundHound doesn't have is message-based solutions, which is where LivePerson can complement the overall business. Through LivePerson, a business can deploy AI agents to answer customer questions on its website, send text message reminders about orders, and offer updates.
Pieced together, the idea is that a business can have an AI agent handle everything from answering phone calls to replying to website questions. The acquisition suggests SoundHound is trying to get ahead of the growing opportunities in the AI agent market. According to Grand View Research, the global AI agent market is expected to climb from $7.6 billion in 2025 to $182.9 billion by 2033.
By integrating LivePerson into its business and cross-selling, SoundHound believes that, at a minimum, revenue will fall between $350 million and $400 million in 2027. If the LivePerson deal closes in the second quarter, it is expected to account for $100 million of that total. As a reference point, revenue in 2025 was $168.9 million, and the company expects 2026 full-year revenue to fall between $225 million and $260 million.
That's why that $100 million is such an important number from the earnings report, as this acquisition could rapidly increase SoundHound's revenue.
What the markets don't like
On paper, SoundHound's acquisition of LivePerson makes sense to create robust AI agent offerings. The issue is that LivePerson is a struggling company, with its stock price plummeting nearly 100% over the past five years.
It's not a guarantee that LivePerson will be successfully integrated into the voice offerings. As an unprofitable company, SoundHound faces an additional challenge with this deal: It will now be proving out its own business model while adding a struggling company to its fold.
Also, as an all-stock deal, there's typically short-term pressure because of investors' concerns about shareholder dilution.
Is the risk worth the reward?
This is an aggressive move by SoundHound, and years down the road, it could prove to be a savvy deal. The AI voice company doesn't have any debt and still expects to remain debt-free if the deal closes, which limits some of the risk.
Still, it all comes down to execution. For those who are bullish, there's still no need to take on excessive risk, making gradual, steady share purchases over time a potentially ideal strategy. That way, you won't have to face extensive losses if the acquisition doesn't work out.
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Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill and SoundHound AI. The Motley Fool recommends Stellantis and recommends the following options: short June 2026 $36 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
