SoundHound AI SOUN shares have gained 12.1% in the past couple of sessions following the release of fourth-quarter 2024 results on Feb. 27, 2025.
Click here to check the details of SOUN’s fourth-quarter 2024 results.
SOUN shares have surged 61.6% in the trailing 12-month period, outperforming the broader Zacks Computer & Technology sector’s increase of 11.2% and the Zacks Computers - IT Services industry’s decline of 3.2%.
The outperformance can be attributed to the company’s increasing demand for its AI solutions and voice AI technologies across multiple industries. Major customer wins, expanded partnerships and advancements in generative AI, along with strong adoption in quick-service restaurants, in-vehicle voice commerce and strategic acquisitions, fueled this growth.
SOUN Outperforms Sector, Industry
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SOUN’s Expanding Portfolio Boosts Prospects
SoundHound saw expansions and new wins in the restaurant industry in the fourth quarter of 2024. This included global chains like Burger King, which went live in the UK, and others like Whataburger, Peet’s Coffee, and Torchy’s Tacos.
As a result of these wins, SoundHound has solidified its position as the largest provider of AI-powered customer service in the restaurant sector, with more than 10,000 locations now utilizing its technology. This widespread adoption underscores the growing demand for AI automation in the food service industry, enhancing both operational efficiency and customer experience.
Building on this momentum, in February 2025, SoundHound introduced the next generation of its voice AI-powered restaurant platform, enhancing its Dynamic Drive-Thru solution with improved accuracy, speed, and omnichannel ordering capabilities. It also extended AI automation to Call-to-Order, Text-to-Order, Scan-to-Order, and In-Car Voice Ordering.
Beyond the restaurant industry, SoundHound’s AI technology is also making significant inroads in the public sector. In the fourth quarter of 2024, SOUN signed a contract with the City of Coral Springs and continued working with federal government agencies and General Dynamics to roll out conversational AI in the public sector.
In the fourth quarter of 2024, SoundHound took the lead in advancing Agentic AI, using its established platform and strong market presence to introduce the next generation of AI-driven capabilities.
Expanding Partner Base Bodes Well for SOUN’s Prospects
SoundHound’s expanding clientele, which includes Rekor Systems REKR and Lucid Group LCID, has been noteworthy. The company’s key partnerships are strengthening its position in the AI-driven voice technology market and enhancing its offerings across different industries.
SOUN’s partnership with Rekor Systems is combining the latter’s vehicle recognition software, Rekor Scout, with SOUN’s voice and conversational AI to create hands-free, voice-controlled systems for law enforcement and first responders. The goal is to make emergency vehicles safer, more efficient and easier to use during critical situations.
SoundHound also partnered with Lucid Group to launch the Lucid Assistant, a hands-free voice assistant for controlling vehicle functions. Powered by SoundHound Chat AI with generative AI technology, it improves in-vehicle experience with real-time data and intuitive controls.
SOUN’s collaborations with NVIDIA NVDA, ARM, Perplexity, Olo and Oracle are expanding its portfolio. SoundHound’s launch of an advanced in-vehicle voice assistant powered by NVIDIA DRIVE brings real-time and generative AI capabilities for seamless, offline vehicle intelligence and personalized assistance.
SoundHound Raises FY25 Guidance
SOUN forecasts 2025 revenues between $157 million and $177 million, indicating year-over-year growth of 97%.
The Zacks Consensus Estimate for 2025 revenues is pegged at $163.64 million, indicating 93.21% growth year over year.
The consensus mark for loss is pegged at 24 cents per share, which has decreased by 3 cents over the past 30 days. The figure indicates a year-over-year increase of 76.92%.
SoundHound AI, Inc. Price and Consensus
SoundHound AI, Inc. price-consensus-chart | SoundHound AI, Inc. Quote
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
SOUN Trading at a Premium
We point out that SOUN stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
In terms of the forward 12-month Price/Sales, SOUN is trading at 23.92X, higher than the industry’s 19.74X.
Price/Sales (F12M)
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What Should Investors Do With SOUN Stock?
SoundHound’s impressive growth, strong partnerships and innovative solutions position it as a major player in AI-driven voice technology.
However, increasing competition in the AI market, particularly in customer service and voice assistant, is expected to hurt SOUN’s performance.
In addition to market competition, the GAAP gross margin for the fourth quarter of 2024 was 40%, which was down year over year. The decline was primarily due to the business and product mix resulting from recent acquisitions.
SoundHound currently has a Growth Score of F, which means it is not an ideal investment for growth-oriented investors. Its stretched valuation is concerning.
SOUN currently carries a Zacks Rank #3 (Hold), suggesting that investors should wait for a better entry point to add the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
