SoundHound AI Stock Is Down 70% From Its 52-Week High. Time to Buy?

SoundHound AI (NASDAQ: SOUN) stock spent the last year on a roller-coaster ride. Its rapidly rising revenue growth and high interest in agentic artificial intelligence (AI) took its stock to a peak of more than $21 per share last October.

However, a high valuation, along with massive losses and shareholder dilution, prompted investors to sell the tech stock. Consequently, it is down almost 70% from that peak after giving back all the gains the stock made since late 2024. Is that enough to make SoundHound AI stock a buy again? Let's take a closer look.

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Where SoundHound AI stock stands

SoundHound AI has built a following with its AI technology that can perform tasks based on voice commands. It became popular with auto manufacturers, but businesses such as restaurants, consumer electronics companies, and tech giants also took an interest.

Since going public in April 2022, SoundHound AI has been a volatile stock. It briefly fell below $1 per share soon after its IPO. Nonetheless, as more investors took notice of the client base and rapid revenue growth, they have bid the stock price above $20 per share twice since late 2024, only to suffer massive pullbacks.

Indeed, bulls have reason to like the stock. Its revenue nearly doubled in 2025, and in the first quarter of 2026, it rose 52% to over $44 million.

Unfortunately, the company has never turned a profit, and in Q1, its operating losses were $23 million, despite a $39 million benefit from a change in the fair value of contingent acquisition liabilities.

Moreover, it has a history of turning to share dilution to raise cash. Although the share count rose by only 5% over the last year, it is up 68% since the beginning of 2024, which has likely worsened the stock sell-offs.

Furthermore, the stock had become quite expensive during its price peaks. The price-to-sales (P/S) ratio briefly exceeded 100 in late 2024 and reached nearly 58 late last year. Today, at 14, its sales multiple is more attractive for buyers.

Still, with revenue growth slowing, that lower valuation may not help. Analysts predict 38% revenue growth for the company this year before it decelerates to 18% in 2027. Investors tend to punish stocks for slowing revenue growth, which does not bode well for the future of SoundHound AI stock.

Is it time to buy SoundHound AI stock?

Given the stock's history and the slowing revenue growth, investors should probably not treat the 70% pullback in the stock as a sign to buy.

Admittedly, anything can happen, and the two moves above $20 per share since late 2024 indicate that SoundHound AI can bounce back under the right conditions.

However, the company's ongoing losses make further stock dilution more likely, which bodes poorly for shareholders. Additionally, revenue growth has slowed, and that has often become a sign of trouble for tech growth stocks.

Amid those challenges, SoundHound AI's stock is more likely to stagnate or fall further than it is to recover.

Will Healy 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.