Why SoundHound AI Stock Rocketed 16.8% Higher in August

After dipping 5.3% lower in July, shares of SoundHound AI (NASDAQ: SOUN) stock jumped higher last month after the artificial intelligence (AI) company' reported strong Q2 2026 financial results.

According to data provided by S&P Global Market Intelligence, SoundHound AI stock rose 16.8% in August.

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$61.9 million in Q2 2026 revenue sounded good to SoundHound AI investors

Surpassing the $52.4 million that analysts had anticipated, SoundHound AI reported second-quarter 2026 revenue of $61.9 million, a 45% year-over-year increase. At the bottom of the income statement, the company also exceeded expectations. While analysts estimated SoundHound AI would report an adjusted loss per share of $0.05, the company posted a slimmer $0.02 adjusted loss per share.

Although SoundHound AI is still incurring a net loss, the company is making progress toward profitability. In Q2 2026, it expanded its gross profit margin to 45.1% from 39% during the same period last year.

In the press release addressing the financial results, SoundHound AI interim CFO and co-founder James Hom lauded the success of the company's recently launched OASYS, an AI system that enables customers to build and deploy conversational AI agents to accomplish several tasks, such as handling transactions, tasks, and workflows on behalf of customers and employees, stating, "We are excited by the strong interest we are already seeing with OASYS, which is a testament to the category-defining technology we continue to deliver to the market. Our investment in innovation, combined with our cost discipline, is key as we drive our business toward achieving profitable growth."

In addition to the recent quarter, investors celebrated the company's updated 2026 revenue guidance, which ranges from $230 million to $260 million. Should the company achieve the midpoint of this forecast, it will represent year-over-year sales growth of 45%.

While the market celebrated the company's financial results, some analysts took a more bearish stance on the AI stock -- a factor that contributed to shares giving back some of the gains they had made immediately after the company's Q2 results announcement. Piper Sandler analyst James Fish, for example, cut the price target on SoundHound to $7 from $8, maintaining a neutral rating. Similarly, Gil Luria, a DA Davidson analyst, reduced the firm's price target to $10 from $12.

SoundHound AI stock is hanging on the discount rack

Falling 5.9% so far in September, SoundHound AI stock has given back some of the gains that it logged in August. Couple this with the fact that shares of the AI stock are trading at 13.9 times sales -- a discount to their five-year average P/S multiple of 17.2 --, and it looks like now's a good time to start a position.

Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends SoundHound AI. The Motley Fool has a disclosure policy.