SoundHound AI's (SOUN 1.43%) stock price has more than tripled over the past 12 months. The developer of voice and audio recognition services dazzled the market with its accelerating revenue growth and aggressive expansion plans, while the buying frenzy in artificial intelligence (AI) stocks amplified those gains. But can it maintain that momentum over the next year?
What does SoundHound AI do?
SoundHound AI's namesake app is used to identify songs from just a few seconds of recorded audio or a few hummed bars. But it generates most of its revenue from Houndify, its developer platform for building customized AI-powered voice recognition services.
Image source: Getty Images.
Houndify's customers include automakers like Stellantis, quick-serve restaurants like Chipotle Mexican Grill, and credit card giants like Mastercard. It's a popular option for companies that want to build customized voice recognition services but don't want to share their data with cloud giants like Microsoft.
Why SoundHound AI's stock might soar higher in a year
SoundHound is growing like a weed. Its revenue rose 47% in 2023, 85% in 2024, and 187% year over year in the first half of 2025. For the full year, it expects its revenue to soar 89% to 110% to a range of $160 million to $178 million. That makes it one of the market's fastest-growing AI stocks.
From 2024 to 2027, analysts expect its revenue to grow at a compound annual growth rate (CAGR) of 47% to $267 million. That growth should be driven by the expansion of its ecosystem in the restaurant and automotive sectors; the rollout of its "Vision AI" tools, which merge visual and voice recognition services; its pursuit of bigger enterprise contracts; and its ongoing investments and acquisitions.
Over the past two years, SoundHound acquired the AI restaurant services provider SYNQ3 and the online food ordering platform Allset to bolster its presence in the restaurant sector. To expand its portfolio of Agentic AI tools for enterprise customers, it acquired the conversational AI company Amelia and the customer service AI company Interactions. It also plans to integrate its voice recognition services into more connected vehicles through a new partnership with the Chinese tech giant Tencent's Intelligent Mobility division. All those irons in the fire make SoundHound a promising play on the agentic AI market, which Precedence Research expects to expand at a CAGR of 43.8% from 2025 to 2034. That expansion could also widen its moat against AI-driven tech giants like Microsoft.
NASDAQ: SOUN
Key Data Points
Why SoundHound AI's stock might collapse in a year
SoundHound is firing on all cylinders, but it's still unprofitable. On a generally accepted accounting principles (GAAP) basis, analysts expect it to narrow its net loss from $351 million in 2024 to $109 million in 2027, but that outlook might be too optimistic.
That's because SoundHound's adjusted gross margin actually declined from 76.2% in 2023 to 58.5% in 2024, then slipped to 55.3% in the first half of 2025. That pressure was mainly caused by its growing dependence on lower-margin restaurant service revenue, rising cloud infrastructure costs, and its high onboarding and customizing expenses for new customers. It's also relying heavily on acquisitions to drive its top-line growth, but that inorganic expansion might mask the slower growth of its older and maturing businesses. Moreover, that strategy could compress its margins with a higher mix of lower-margin revenue and higher operating costs.
SoundHound could continue to dilute its existing shares with more secondary offerings and stock-based compensation expenses as it struggles to cover its persistent losses. It's already more than doubled its number of outstanding shares since it went public by merging with a special purpose acquisition company (SPAC) on April 28, 2022.
Last but not least, SoundHound's stock looks overheated. With a market cap of $7.4 billion, it already trades at 35 times next year's sales. Its insiders were net sellers over the past 12 months, and Nvidia liquidated its entire stake in the company earlier this year. Those red flags indicate too much growth has already been baked into its high-flying stock.
Where will SoundHound AI's stock be in one year?
SoundHound will benefit from the expansion of the agentic AI market, but it probably won't climb much higher within the next 12 months. It's already trading at frothy valuations in an expensive market, so it could be due for a breather. Speculative investors can still nibble on this AI stock, but they shouldn't be surprised if it suffers a near-term slump.
