Should You Buy SoundHound AI Stock Before May 7?

Investing in a fast-growing business can be exciting, but it's important not to get too enamored with just a company's growth rate. An easy way for a company to expand its top line is to acquire other businesses. But what's ultimately most important for growth investors is how well the business is growing, organically, not just due to acquisitions.

SoundHound AI (NASDAQ: SOUN) is a voice artificial intelligence (AI) company that has been relying on acquisitions to get bigger and more diversified. Investors, however, have been looking for more than just top-line growth from the business, which is indicative of its poor performance in recent months, as the stock is down around 64% from its 52-week high.

On May 7, the company will report its first-quarter earnings for fiscal 2026, in what will inevitably be its latest test to show that it's going in the right direction. With its valuation relatively low, could now be a good time to buy SoundHound AI stock?

Image source: Getty Images.

SoundHound's growth has been highly volatile

While SoundHound has been experiencing significant revenue growth in recent years, its actual quarterly growth rate has fluctuated considerably from one period to the next. In its most recent period, which covered the last three months of 2025, its growth rate was nearly 60%.

SOUN Revenue (Quarterly YoY Growth) data by YCharts

Acquisitions have muddied the picture growth story for SoundHound AI, as they have given the company's top line a boost, and that's not indicative of its true organic growth rate. As a result, SoundHound's growth starts to look far less impressive when taking that into account.

One of its largest deals involved acquiring AI company Amelia AI back in August 2024 for $80 million, which helped to drastically expand its customer base. More recently, on April 21, the company announced plans to acquire LivePerson, which it calls a "pioneer in enterprise conversational AI," in a deal that values the business at $43 million.

Amid all its wheeling and dealing, profitability, however, remains elusive for SoundHound AI. The company incurred a net loss of more than $14 million in 2025, and that was with a change in fair value of contingent acquisition liabilities totaling $163 million, which made its bottom line look far better than it otherwise would have been.

Why I wouldn't buy SoundHound AI stock

Although SoundHound AI's business has been growing, it's largely been due to acquisitions. And in continually acquiring companies, that add costs and complexities along the way, which it will inevitably need to cut out from its operations if it wants to get to profitability anytime soon.

At a time when investors are starting to question AI spending and investments, SoundHound AI may need to do more than just demonstrate a high growth rate. It wasn't enough to give the AI stock a big boost back in February when it reported its fourth-quarter earnings, and I don't think it'll be enough to win over growth investors now, either.

The stock is down 19% this year, and unless it shows considerable improvement with respect to earnings, I believe it'll continue to struggle in the weeks and months ahead. There's no rush to buy the stock, as a wait-and-see approach with SoundHound AI may be appropriate.

David Jagielski, CPA 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.