A $5,000 Investment in SoundHound AI Made at the Start of the Year Doesn't Look Good Now. Can It Rebound in the Second Half?

On Jan. 2, SoundHound AI (NASDAQ: SOUN) stock opened at $10.29. On June 30, it closed at $6.47. For the first six months of the year, that represents a loss of roughly 37%, a tough start for anyone who invested at the beginning of the year.

The decline was due to several factors. And while there is an opportunity for the stock to rebound in the second half, it's going to be an uphill battle.

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A $5,000 investment in SoundHound at the start of 2026

Purchasing $5,000 worth of SoundHound stock at $10.29 would have given an investor roughly 485 shares. By June 30, the end of the first half of the year, that stake would have been worth roughly $3,143.

There's been a lot weighing on the stock price during that time, including concerns over the company's continued unprofitability, worries about shareholder dilution, and fears about the impacts of a high-risk, but potentially high-reward, acquisition.

On the positive side, SoundHound AI keeps posting impressive revenue totals: In 2025, the top line increased 99% to $168.9 million, and first-quarter 2026 revenue increased 52% to $44.2 million.

The issue, however, is that more investors want to see artificial intelligence (AI) companies showing signs that they are headed toward profitability rather than continually burning through cash. For the first quarter, SoundHound reported a net loss of $25 million, according to generally accepted accounting principles.

In addition, with SoundHound AI in particular, there are concerns about shareholder dilution and a looming acquisition. It is trying to buy the conversational AI agent company LivePerson (NASDAQ: LPSN) for $43 million, and that deal -- an all-equity transaction, which is dilutive to shareholders -- is expected to close by the end of this year.

What shows promise

There are many risks involved in the acquisition. LivePerson is not a profitable company and has struggled heavily. Its stock price is down by more than 99% over the last five years. But if SoundHound can successfully integrate LivePerson's tech into its offerings, the deal could provide long-term value.

SoundHound AI expects its 2027 revenue to land between $350 million and $400 million, with $100 million of that coming from LivePerson. Given that SoundHound's revenue was just under $170 million in 2025, that would be a significant jump.

Why the rest of 2026 could still be bumpy

SoundHound AI is likely to keep up its strong revenue growth, but dilution concerns and the pending LivePerson deal still hang heavily over the stock. If the stock price does rebound, it likely won't occur until after the LivePerson acquisition is finalized and investors have a few quarters to see whether it's actually benefiting the buyer.

SoundHound AI is a promising company that has landed many big-name clients, including Walmart, but for shareholders, the second half of the year could be just as rocky as the first.

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.