For its dimension, SoundHound AI(NASDAQ: SOUN) will get quite a lot of consideration. The corporate has a market capitalization of solely $4.5 billion, however its common buying and selling quantity exceeds 21 million shares — or greater than twice the buying and selling quantity of different shares with related market caps.
One purpose SoundHound receives consideration is its place within the quickly rising synthetic intelligence (AI) house. SoundHound’s AI platform allows customers to interact in conversations with voice-enabled companies and functions.
It additionally garnered vital consideration in 2024, when Nvidia disclosed that it had taken a stake within the firm throughout an earlier non-public enterprise spherical. And despite the fact that Nvidia offered that stake greater than a yr in the past, SoundHound nonetheless will get buyers’ consideration.
Picture supply: Getty Photographs.
At the moment, SoundHound inventory trades at round $11 per share, and the inventory worth has decreased by 38% during the last yr. Nonetheless, it is shortly increasing its buyer base to incorporate tech corporations, automakers, and eating places, and has a strong money place with no debt. Ought to it’s a part of your funding portfolio in 2026?
SoundHound AI has quite a few functions, together with automotive, eating places, voice commerce, and a music app that identifies music, whether or not it is being performed or hummed. SoundHound’s clients can create customized AI-powered voice assistants to deal with incoming calls, embed brand-specific info into merchandise, and make use of customized voice AI merchandise. It will also be used for inside tasks, equivalent to offering staff with voice entry to manuals and coaching.
SoundHound’s AI platform is able to listening, reasoning, and appearing, with a median latency of solely 350 milliseconds. And it is constructed to work with every kind of enormous language fashions, together with these provided by Mistral AI, OpenAI, and Anthropic. The corporate at the moment has greater than 400 patents, guaranteeing its management place in voice AI.
Its core automated speech recognition (ASR) product is Polaris, which allows better automation by means of omnichannel AI-powered ordering — that means it may possibly deal with drive-thru kiosks, cellphone calls, texts, scans, or voice ordering. “Polaris, in our view, is one other vital disruption that widens the hole between us and the competitors in our journey to appreciate SoundHound’s imaginative and prescient,” CEO Keyvan Mohajer mentioned.
At the moment, SoundHound states that it has contracts with 7 of the highest 10 world monetary establishments and has signed a brand new cope with an unnamed Chinese language firm to combine SoundHound Chat AI into tens of millions of AI-enabled good units, initially to be distributed within the Indian market.
It has different contracts with healthcare corporations, insurers, vitality corporations, well being golf equipment, and lots of eating places, together with White Citadel, Chipotle Mexican Grill, and 5 Guys.
“Among the largest corporations on the planet are coming to us for options to deal with their AI targets,” Mohajer mentioned. “We’re on the very starting of addressing the large market alternative in entrance of us.”
With every thing taking place at a fast tempo, you would possibly assume that SoundHound inventory is a can’t-miss alternative. And sure, the inventory is up a whopping 929% within the final three years, regardless of the comparative weak spot within the final 12 months.
A part of the issue is that SoundHound is withstanding steep losses. Though income within the third quarter was a document for the corporate at $42 million (up 68% from a yr in the past), SoundHound posted a web lack of $109.2 million and a loss per share of $0.27.
Lots of that has to do with knowledge heart prices and acquisitions as the corporate continues to scale, nevertheless it’s troubling for buyers to soak up these sorts of losses. However administration is projecting full-year income to be within the vary of $165 million and $180 million, and for fourth-quarter losses to be lower than $10 million. “We see extra acquisition price synergies of roughly $20 million on an annual run fee foundation to be realized extra totally in 2026, which can set us up nicely as we align our group with the large tailwinds behind us,” Chief Monetary Officer Nitesh Sharan mentioned.
Undoubtedly, it prices some huge cash to create modern applied sciences like SoundHound is rolling out. And the work it is doing is spectacular. Its latest product, which was introduced Jan. 5, consists of an agentic AI platform that may do duties equivalent to examine electronic mail, alter schedules, ebook flights and accommodations, and make restaurant reservations.
I would not anticipate quick enchancment from SoundHound inventory. However I do assume it is a good alternative to purchase a compelling firm that is beginning the yr at a reduced worth. Ought to the corporate efficiently scale back its losses and inch towards profitability, the inventory is more likely to proceed its upward pattern in 2026.
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Patrick Sanders has positions in Nvidia. The Motley Idiot has positions in and recommends Chipotle Mexican Grill, Nvidia, and SoundHound AI. The Motley Idiot recommends the next choices: quick March 2026 $42.50 calls on Chipotle Mexican Grill. The Motley Idiot has a disclosure coverage.
