Down 66% From Its High: Is SoundHound AI Finally a Screaming Buy?

SoundHound AI (NASDAQ: SOUN) provides companies with artificial intelligence technology to deliver voice services to their customers. There is a material cost benefit to using AI over humans, but Wall Street appears to have lost interest in SoundHound's stock, which is down 66% from its all-time high in late 2025. Is it a screaming buy?

SoundHound is growing fast

The good news is that SoundHound's top line is expanding rapidly. Sales rose from roughly $85 million in 2024 to nearly $169 million in 2025. That's an increase of just under 100%. Management is projecting revenues to fall between $225 and $260 million in 2026. At the low end, that's top-line growth of 33%, with the high end suggesting growth of just over 50%.

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While 33% to 50% revenue growth is down materially from 100%, it is kind of hard to complain about what still amounts to a very rapid sales increase. There's just one wrinkle in the mix that you shouldn't ignore. The company isn't profitable, so it is still a money-losing technology start-up. The artificial intelligence angle is exciting, but, at the end of the day, SoundHound is just a software company. With the rapid development of AI, it may not be able to differentiate its products for much longer.

The earnings numbers are complicated

To make the story even more uncertain, SoundHound's earnings are complicated by the "fair value of contingent acquisition liabilities where future earn-out shares" are in play. These shares are related to past acquisitions and have to be marked to market values each quarter, which can materially impact the company's earnings.

For example, in the fourth quarter of 2025, SoundHound's falling stock price resulted in a benefit, as its contingent acquisition liabilities declined along with its stock price. That added to GAAP earnings, pushing the company into the black. Take out that non-cash item and the company continues to lose money.

For most companies, GAAP earnings are lower than non-GAAP earnings, as companies aim to remove one-time negative impacts. The opposite is true here, at least at the moment.

Cheaper than it has been, but still only for aggressive investors

SoundHound is much cheaper than it has been, and it is still growing revenues at a rapid clip. That could make it worth buying for more aggressive growth investors. However, given the ongoing red ink and the complexity of the earnings statement, more conservative investors should probably still be sitting on the sidelines here as the market for AI products continues to evolve.

Reuben Gregg Brewer 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.