Is SoundHound AI's Latest Acquisition a Game Changer for the Stock?
Key Points
SoundHound AI could potentially deepen its artificial intelligence agent capabilities.
It entered into a definitive agreement to acquire LivePerson.
SoundHound AI expects LivePerson to significantly help boost sales.
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SoundHound AI (NASDAQ: SOUN), a company specializing in voice-enabled artificial intelligence (AI) services, could soon expand both its revenue and reach. It has entered into a definitive agreement to acquire LivePerson (NASDAQ: LPSN), a company specializing in AI messaging, for $43 million in equity.
Based on how the SoundHound stock price performed on the day of the announcement, investors weren't initially cheering the news, but management at the AI voice company believes LivePerson will deliver a revenue boost well worth the cost.
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Building a more robust AI company
Engaging with customers and potential customers extends beyond a phone call. Companies need a plan in place to meet customers where they are, whether through a phone call, a website message, or a social media interaction.
That's where LivePerson comes in, offering a range of messaging solutions. In the finance industry, its AI agents can interact with customers by providing loan application details, preapprovals, and other alerts. LivePerson's technology also has use cases in the healthcare, automotive, retail, and travel and hospitality industries.
The combination of the two allows SoundHound to offer its AI solutions to LivePerson's customers, and vice versa. SoundHound expects that cross-selling will generate $500 million in revenue based on each company's current customer base.
That $500 million in sales would be quite the jump from the nearly $169 million in revenue SoundHound reported in 2025.
What investors are worried about
Announcing an acquisition typically weighs on a company's stock price, as investors worry about how it's being paid for and how long it will take to see a return on that investment. For SoundHound AI in particular, it's an unprofitable company, increasing the concern.
If the transaction closes and the integration works out, LivePerson could be a long-term asset for SoundHound. This could ultimately prove to be a savvy move, but it will take time to see whether the integration will add to revenue totals as expected. SoundHound is a promising growth stock, but it's also a speculative investment, warranting only a small allocation in a portfolio for investors who understand the risks.
Should you buy stock in SoundHound AI right now?
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Jack Delaney 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.
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