Is SoundHound AI Stock a Buy Now?

I thought SoundHound AI (NASDAQ: SOUN) was a strong buy in December. As of Jan. 5, the stock price is down 8% from that point, though I've seen nothing but good news around the voice command specialist in that period. Long story short, I'm even more into SoundHound AI's stock nowadays.

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SoundHound AI was doing AI before you had a smartphone

As a reminder, SoundHound AI has been developing artificial intelligence (AI) tools for audio analysis for two decades. The original Midomi app, later renamed to SoundHound, identified songs heard by your smartphone's microphones, using the mobile hardware of 2006. The company added more use cases and customers over the years and decided to shoot for commercial success with a cash-raising special purpose acquisition company (SPAC) merger in 2022.

The stock soared in 2024, as AI giant Nvidia (NASDAQ: NVDA) made a small investment in SoundHound AI stock. More to the point, Nvidia CEO Jensen Huang has been serving business tips to SoundHound AI leader Keyvan Mohajer for about 10 years. And the two companies are working together, developing voice control systems on Nvidia hardware that can do their job without an active internet connection.

You should also know that SoundHound AI's low-key financial results are about to change. The company has a deep backlog of long-term contracts that should deliver more than $1.2 billion of revenue over the next seven years. At the same time, the backlog itself is growing quickly. February's Q4 2025 report should come with an updated backlog figure, and I expect some serious growth in this indicator of future sales and profits.

Good news, bad stock chart -- what gives?

That's old news, of course. SoundHound AI investors saw the Nvidia connection years ago, and the order backlog is well known.

Yet SoundHound AI's stock has fallen 38% in the past three months despite a steady flow of shareholder-friendly news:

• On Dec. 10, SoundHound AI's platform integrated with restaurant reservations specialist OpenTable, a subsidiary of Booking Holdings (NASDAQ: BKNG) since 2014. This deal added more than 60,000 OpenTable locations to SoundHound AI's conversational AI system. Tell your car where you're going and what kind of restaurant you're interested in, and the reservation is done without paperwork or phone calls.
• The next day, CFO Nitesh Sharan took the stage at an industry conference to highlight SoundHound AI's technology advantage. There are many competing voice AI systems from giants including OpenAI, Microsoft, and Google, but SoundHound AI's tools consistently outperform the others in terms of speed and accuracy. The advantage is larger in noisy environments such as drive-through windows, cars on the highway, or busy call centers.
• This week, the company launched the Amelia 7 agentic AI platform at the CES 2026 conference. It's a powerful orchestration tool that pulls together a heap of AI helpers into a coherent user experience. In the future, companies can build business-specific vehicle platforms around proprietary data and in-house AI agents.

You'd think these tidbits would lift the stock, but SoundHound AI's price chart tells a different story.

Yes, there are risks -- but the opportunity is bigger

I admit that SoundHound AI is a risky investment. Order backlogs don't convert into revenue automatically -- the company must meet its end of many different deals to lock down the pending revenue. In the meantime, the company is deeply unprofitable and has an uncomfortable habit of raising more cash by printing more stock shares. The diluted share count rose 14% over the past four quarters, while net losses increased from $21.8 million to $109.3 million.

But the AI expert is staring down some tremendous growth opportunities, and the revenues are starting to trickle in. A few years from now, the trickle should become a flood. The stock may look expensive today, but this $4.3 billion market cap may look quaintly cheap as the voice control business evolves. In my book, SoundHound AI is a great buy right now.

Anders Bylund has positions in Alphabet, Nvidia, and SoundHound AI. The Motley Fool has positions in and recommends Alphabet, Booking Holdings, Microsoft, Nvidia, and SoundHound AI. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.