While its stock price has rallied in recent months, SoundHound AI (SOUN 3.35%) is still trading down nearly 30% from its 52-week high. The stock experienced a frantic rally to end last year, after it was revealed that Nvidia had taken a stake in the company (which it has since sold).
While Nvidia no longer has a position in the stock, the SoundHound story today is actually more interesting than it was when Nvidia bought it.
Image source: Getty Images.
Transition to a voice-first agentic AI company
While a young company, SoundHound has consistently evolved its business in a fast-moving technology landscape. The company started simply as a music recognition app, but was later able to build on top of that to become an artificial intelligence (AI) voice company.
Its platform uses "speech-to-meaning" and "deep meaning understanding" technology to infer what someone wants in real time before they are even done talking. The technology quickly caught on with automobile customers looking to offer customers better in-car voice assistant experiences, as well as with restaurants, which use the technology for things like phone orders, drive-thrus, and even employee training.
NASDAQ: SOUN
Key Data Points
However, the company is now looking to transition into a voice-first agentic AI company. The foundation of this move comes from its 2024 acquisition of Amelia, which was a leader in virtual agents for industries like healthcare, insurance, and financial services. These are consumer-facing, regulated industries that not only have compliance and transactional complexity, but also industry-specific jargon.
The deal immediately gave SoundHound a slew of customers in new industry verticals. However, the most important benefit the company got from the deal was access to Amelia's conversational intelligence technology, which is the basis for its newest push into AI agents.
By combining SoundHound's AI voice technology with Amelia's tech, the company has recently introduced a new voice-first AI platform called Amelia 7.0. Instead of just being a voice recognition platform, Amelia 7.0 was developed to act more like a digital employee that can interact with people more naturally, understand their intent, and then go out and autonomously complete tasks based on that interaction.
It can also be integrated right into customers' enterprise systems, such as enterprise resource planning (ERP) platforms, customer relationship management (CRM) platforms, and financial and insurance platforms, among others.
If you've ever used the voice features on chatbots, you may notice they often struggle to understand you, let alone your intent. As the world moves beyond generative AI and toward agentic AI, this voice piece is only going to become more important. This could position SoundHound very well for the future. It also recently acquired a company called Interactions, which will enable it to better orchestrate its AI agents and allow it to fully automate customer service.
SoundHound was already growing quickly before the launch of Amelia 7.0. In Q2, it grew its revenue by an astonishing 217% and raised its full-year outlook. It's now in the process of migrating 15 of its largest enterprise customers onto Amelia 7.0, which should help lead to continued strong growth.
Should investors buy SoundHound stock?
SoundHound is still very much a speculative stock at this point. While it's growing its revenue quickly, the company is still not yet profitable, and it has negative operating cash flow. It also needs to boost its gross margins, as while the Amelia deal brought with it some important technology, it also included some less-than-favorable contracts that likely need to eventually be reworked. The stock is also not cheap, trading at a forward price-to-sales (P/S) multiple of 34 times 2026 analyst estimates.
That said, if SoundHound can become an agentic AI leader, the upside in the stock from here could be tremendous. Its voice-first approach is a key differentiator, and the company has shown a great ability to adapt. That makes it worth taking a small, speculative position in the name.
