Down 72%, Should You Buy the Dip in SoundHound AI?
Key Points
The stock has fallen significantly below its previous peak, yet the business continues to grow rapidly.
One Fortune 100 company saved $10 million in quarterly costs from using SoundHound's new agentic AI platform.
There is competition, but SoundHound offers pure exposure to a market that could be worth tens of billions in the next decade.
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After surging to new all-time highs over a year ago, SoundHound AI (NASDAQ: SOUN) stock has plunged 72%. Yet the business continues to expand rapidly, with revenue surging 52% year over year in the first quarter.
Is this an ideal time to buy shares, or does the volatility signal a problem with the growth story?
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SoundHound AI is a volatile stock but patient investors could be rewarded. It has spent 20 years collecting data from user interactions to develop its voice AI technology. Restaurants and automakers are using it to power drive-thru ordering and in-car assistants.
The company recently unlocked another huge opportunity with its OASYS agentic AI system. This platform allows businesses to build a fleet of agents that continuously train and improve. One Fortune 100 company has already saved $10 million in quarterly costs by using SoundHound's platform.
Voice AI assistants could be one of the fastest-growing consumer applications over the next decade. The market is expected to reach $47 billion by 2034, growing nearly 35% annually, according to Market.us.
The stock's volatility largely reflects the company's lack of profitability. It reported a $26 million adjusted net loss in the first quarter 2026, and negative free cash flow of $113 million on a trailing-12-month basis. Moreover, SoundHound faces competition from tech giants like Google, which is also working on voice AI technology.
Still, SoundHound AI offers investors pure exposure to this burgeoning market. The recent pullback may provide a more attractive entry point to start a small position. The stock will remain volatile, but the long-term upside could be significant for a small AI company with a market cap close to $3 billion.
Should you buy stock in SoundHound AI right now?
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John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and SoundHound AI. The Motley Fool has a disclosure policy.
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