NEW YORK, July 17, 2026, 3:09 p.m. EDT — SoundHound AI NASDAQ:SOUN shares rose after merger calculations indicated a potential 20-point gain in margins.
- Shares rose 0.3% to $6.33, recovering after a 5.2% drop to the session’s low.
- Trading volume totaled 39.0 million shares, about 33% higher than the 65-day average.
- Pro forma gross margin for Q1 came in at 51.6%, compared with 31.1% on a standalone basis.
SoundHound AI shares reversed earlier losses on Friday while U.S. markets remained open. The stock last changed hands at $6.33, having fluctuated between $5.98 and $6.43. Shares were still down approximately 4.7% for the week.
The turnaround occurred on 39.0 million shares, around 33% higher than typical volume just before the market close.
The move was not accompanied by a new company statement. The most recent update on SoundHound’s investor page remained July 13.
The remaining key issue is the planned acquisition of LivePerson NASDAQ:LPSN. Investors are weighing if the increased margins can offset the dilution from issuing extra shares.
Early SEC figures indicate total first-quarter revenue reached $101.2 million, marking a 129% increase over SoundHound’s standalone $44.2 million. Combined GAAP gross margin would climb by 20.5 percentage points.
| Q1 2026 metric | SoundHound standalone | Preliminary pro forma combined | Change |
|---|---|---|---|
| Revenue | $44.2 million | $101.2 million | +128.9% |
| GAAP gross margin | 31.1% | 51.6% | +20.5 points |
| GAAP net loss | $25.0 million | $24.6 million | 1.5% less |
| Basic weighted shares | 421.5 million | 464.1 million | +10.1% |
| Cash and equivalents | $215.6 million | $262.4 million | +21.7% |
The data remain preliminary and unaudited. Percentage changes are based on SoundHound’s July 13 SEC filing.
LivePerson reported a Q1 gross margin of around 70.9%. The increase in higher-margin revenue is a key factor behind the overall gains.
The combined preliminary net loss stands at $24.6 million, with SoundHound’s individual loss reported at $25.0 million. The figures are adjusted by excluding LivePerson’s interest expense and do not include anticipated synergies.
The increase in share count is significantly less than the boost in revenue. Basic weighted shares are up by 42.6 million, or 10.1%. That forms the central investment premise.
The price collar for the deal has become relevant. The stock portion is determined by a 10-day SoundHound VWAP, with a minimum of $7 and a maximum of $12. With SoundHound at $6.33, a further decline would not raise the share count due to the floor set by the VWAP. Additional closing adjustments remain in place.
SoundHound has the option to substitute certain noteholder stock with cash. The initial balance sheet lists $262.4 million in cash and reports no long-term debt, provided the deal is finalized.
Chief Executive Keyvan Mohajer described the deal as broadening the company’s channels. “Our combined customers will realize immediate value through expanded capabilities and enhanced scale,” he said in announcing the transaction. LivePerson, Inc.
C3.ai NYSE:AI traded mostly flat on Friday. Shares in BigBear.ai NYSE:BBAI declined by 2.1%, and LivePerson dropped 2.3%. SoundHound outperformed both peers in afternoon trade.
Positioning can magnify each action. As of June 30, short interest stood at 162.9 million shares, representing roughly 41.2% of the float. This does not confirm that Friday’s rebound was due to short covering.
Risks remain significant. The deal still needs approval from LivePerson shareholders and regulators. SoundHound spent $26.3 million in operating cash in Q1. Final accounting for the acquisition may also differ substantially.
For investors, the criteria for the merger remain straightforward. The 20-point margin increase must remain after integration, with dilution holding around 10%. Friday’s rebound altered the price but did not affect that standard.
