SoundHound AI Stock Skyrockets on Red Lobster Deal – Is SOUN the Next Big AI Winner or Overhyped?

SoundHound AI (SOUN) Stock Soars on 217% Growth and Big AI Deals – Insider Sell-Off Stirs Caution

  • Ticker & Price: SoundHound AI (NASDAQ: SOUN) is trading around $16 (closed $15.94 on Sept 26, 2025) Stockanalysis. After a blistering 2024 rally (stock up ~835%) the shares have given back ground in 2025, down roughly 20–27% year-to-date Nasdaq. In the past 12 months SOUN is still up about +219% Tradingview. (All-time high was $24.98 on Dec 26, 2024 Tradingview.)
  • Market Cap & Volume: (As of late Sept) SOUN’s market cap is roughly $2.5B. Volume runs in the tens of millions of shares daily. Volatility is high (beta ~3.3) with big swings around news events Tradingview.
  • Recent Price Movement: SOUN jumped sharply in mid-Sept (e.g. up 6.5% on Sept 22) when new deals were announced, but then fell ~10% on Sept 25–26 after six top executives sold stock Insidermonkey Stockanalysis. For example, SOUN closed at $18.05 on Sept 23, then slid to $16.35 on Sept 25 (−8.0%) and $15.94 on Sept 26 Insidermonkey Stockanalysis.
  • Financial Highlights: In Q2 2025 SoundHound reported record revenue $42.7M (up 217% year-over-year) Soundhound. GAAP net loss was $74.7M (non‑GAAP loss $11.9M) Soundhound. The company raised full-year 2025 revenue guidance to $160–178M (midpoint ~$169M) Tradingview, implying roughly 100%+ growth vs. 2024. SoundHound remains unprofitable but is narrowing losses (non-GAAP EPS was -$0.03 in Q2 Soundhound).
  • Business & Partnerships: SOUN is winning big enterprise deals. Recent updates include a Red Lobster partnership (AI phone ordering) Soundhound, integration of SoundHound Chat AI into Jeep vehicles in Europe Soundhound, a healthcare partnership with Primary Health Solutions (AI agent “Denise” for patient scheduling) Businesswire, and the strategic acquisition of Interactions (AI customer-service software) Soundhound. In August it also launched a new “Vision AI” product Soundhound. Together these deals expand SOUN’s reach in restaurants, auto, healthcare and enterprise AI.
  • Analyst Consensus: Six analysts rate SOUN a “Buy” on average Stockanalysis. The average 12-month price target is around $14–$15 Stockanalysis (below the current price), reflecting mixed sentiment. Analysts project roughly $169–170M revenue in FY2025 (about 100% growth) and ~$219M in 2026 Stockanalysis.

Stock Price Performance

SoundHound’s stock has seen wild swings this month. After hitting ~$17–18 in mid-September (helped by new partnership news), SOUN slipped ~13% in two days (Sept 24–25) following filings showing insiders sold over $8M of stock Insidermonkey Tipranks. Shares declined on Sept 25 (8.04% drop) and again on Sept 26 (–2.51%) Insidermonkey Stockanalysis. TradingVolume surged as executives sold and market sentiment turned cautious.

Over the past year SOUN has climbed dramatically on strong growth: tradingView notes a +218.8% 12-month return Tradingview. It peaked near $25 in late 2024 (boosted by Nvidia’s stake and major customer wins) Tradingview. Since January 2025, however, the stock has given up a portion of those gains (Motley Fool reports ~21% decline through mid-Sept Nasdaq).

Overall, SOUN has been a volatile “AI play”: analysts note that its high valuation (trading at ~50x sales) already reflects optimistic growth Nasdaq. The recent insider selling sparked a pullback (TipRanks called it a “Very Negative Insider Confidence” signal Tipranks), but some technicians see the stock in a broad uptrend with potential support ~15.90 Stockinvest.

Financial Results and Outlook

SoundHound’s quarterly results have been impressive top-line but still unprofitable. In Q2’25 (ended June 30) the company reported $42.7 million in revenue, a 217% year-over-year jump Soundhound. This all-time high was driven by broad growth in its three businesses (automotive voice AI, enterprise AI agents, and restaurant automation). At the same time, GAAP net loss was $74.7M ($0.19 loss per share), though on a non-GAAP basis the loss was just $11.9M (EPS -$0.03) Soundhound.

Management highlighted this as a “strong quarter”: CEO Keyvan Mohajer said many strategic moves paid off across every business line Soundhound. CFO Nitesh Sharan added that “underlying momentum manifested in financial results” and SoundHound is moving quickly to capture the industry “explosion” in voice/conversational AI Soundhound. He also stated the company expects to sustain roughly 50% organic growth going forward Nasdaq, underlining their aggressive expansion.

Importantly, SoundHound raised its 2025 outlook after Q2. The company now expects $160–178M in revenue (midpoint $169M) Tradingview, up from prior guidance. This targets about 100% year-over-year growth (vs. FY2024). Analysts at StockAnalysis note Wall Street forecasts ~$169.6M for 2025 (+100%) and ~$218.9M for 2026 (+29%) Stockanalysis. Losses are still projected: FY2025 EPS is forecast near -$0.03, improving from larger losses in 2024 (reflecting growth in scale) Stockanalysis.

In summary, SoundHound is hitting hypergrowth top-line targets: one analyst notes Q1’25 rev was +150% YOY and FY2025 revenue ~doubled at guidance Entrepreneur. The company is debt-free (no long-term debt) but has funded growth via equity — its share count rose ~45% over the past year Entrepreneur. With cash on hand and no debt, SoundHound can invest heavily in R&D and sales. Profitability remains elusive (GAAP losses are large due to stock-based comp and acquisitions), but non-GAAP cash burn has narrowed. MarketBeat analysts argue SOUN is “on track to reach profits within two to three years” as it scales Entrepreneur Entrepreneur.

Recent Partnerships and Business Updates

SoundHound has announced several major partnerships and launches in the past few weeks, broadening its customer base:

  • Red Lobster (Sept 23, 2025): SoundHound’s AI phone-agent is being rolled out across all Red Lobster restaurants for automated order-taking Soundhound. The system, trained on the full menu, “makes ordering faster, easier, and more efficient for both guests and staff” Soundhound.
  • Jeep Vehicles (Aug 26, 2025): SoundHound’s new “Chat AI Automotive” voice assistant (with integrated generative AI) is now live in select Jeep models in Europe Soundhound. COO Michael Zagorsek says this integration “sets a new standard for intuitive, connected, and safe driving” by blending in-car controls with advanced AI Soundhound.
  • Primary Health Solutions (Sept 4, 2025): Partnered with this U.S. community health network to deploy an AI patient assistant (“Denise”) for scheduling appointments and inquiries Businesswire. The AI agent will handle routine tasks (appointments, confirmations) to “take the friction out” of healthcare scheduling, freeing staff for complex issues Businesswire Businesswire.
  • Interactions Acquisition (Sept 9, 2025): SoundHound acquired Interactions, a leader in AI-powered customer-service software Soundhound. This deal adds dozens of large enterprise customers (Fortune 100+ brands) and many patents to SoundHound’s portfolio Soundhound Soundhound. CEO Mohajer commented that Interactions is “unquestionably a pioneer in the field… Bringing them on board makes SoundHound even stronger” in the emerging era of AI agents Soundhound.
  • Vision AI Launch (Aug 8, 2025): Introduced a new multimodal AI engine that unites visual perception with voice AI Soundhound Soundhound. Vision AI enables applications like in-car search and retail inventory voice queries. Mohajer said this product “extends our leadership in voice and conversational AI to redefine how humans interact” with technology Soundhound.
  • Other Wins: Q2 business highlights show 7 of the top 10 global banks as customers (with multiple upsells) Soundhound, and dozens of new restaurant wins (e.g. Peter Piper, Applebee’s/IHOP) Soundhound. The company also formed partnerships with QSR technology providers (Acrelec, AVANT) to expand drive-thru AI globally Soundhound. All divisions are growing: voice commerce pilots with major auto brands, cross-selling AI platforms to existing clients, and new wins in retail and finance.

Market Sentiment and Expert Commentary

Investor sentiment around SOUN is mixed. The barrage of positive news (record growth, big partnerships) has been offset by high valuation concerns and recent insider selling. When six executives sold stock between Sept 22–24 (total ~$8M) Insidermonkey Tipranks, SoundHound’s share price dipped sharply, as traders worried management might be taking profits. TipRanks notes this has generated a “Very Negative Insider Confidence” signal Tipranks.

Analysts and industry experts offer varied views. A Motley Fool writer recently praised SoundHound’s rapid expansion and potential, but warned the stock trades at “over 50 times sales”, which is “far from cheap” Nasdaq. Oppenheimer’s new coverage (Sept 11) gave SOUN a “Perform” (hold) rating: analyst Brian Schwartz called SoundHound a “durable growth compounder” with a strong technology platform Finviz, but cautioned that competitive risks and the current 26× 2026 EV/revenue multiple may imply expectations are already lofty Finviz.

Management remains upbeat. CEO Mohajer states confidence that AI agents are the future: “We’re rapidly moving towards a future of AI agents… Interactions is unquestionably a pioneer in the field…[which] makes SoundHound even stronger as we establish the company as a true leader for the new AI era” Soundhound. CFO Sharan emphasized that the business is “moving with speed to capture the explosion… in the voice and conversational AI industry” Soundhound.

On social media and forums, SOUN has drawn both fans and skeptics. Some traders see it as a high-upside AI play (a “meme stock” in the making), while others stress its lack of profits and warn of pullbacks. Nonetheless, the crowd’s enthusiasm for AI has kept analysts from turning fully bearish: most consensus ratings remain “buy” Stockanalysis, even after the stock’s recent drop.

Analyst Forecasts and Price Targets

Wall Street’s forecasts for SOUN generally expect continued hypergrowth but acknowledge risk. Of the 6 covering analysts, all have “Buy” or stronger recommendations Stockanalysis. Their average 12-month price target is about $14.50 Stockanalysis (implying a slight downside from current levels), with targets ranging $8–$18. Notable estimates include Wedbush’s $16 target Stockanalysis and HC Wainwright’s $18 Stockanalysis.

Analysts largely agree that 2025 will be another strong year: consensus calls for ~$170M in revenue (about double 2024) Stockanalysis. They forecast growth cooling to ~30% in 2026 (to ~$219M) as the business scales. Most believe SoundHound will remain unprofitable through 2025, with non-GAAP breakeven on the horizon. For example, TipRanks notes the consensus EPS is -$0.03 in 2025 (flat to improved) before falling to -$0.30 in 2026 Stockanalysis.

In summary, analysts see SOUN as a “high-risk, high-reward” AI growth stock. The average view: strong growth justifies aggressive valuation, but the recent rally has priced in much of the next 1–2 years’ upside. As one market note warns, the stock “trades at a sky-high valuation, which could be a barrier to further upside” until concrete profits appear Nasdaq. Still, if SoundHound hits its targets, today’s price might seem reasonable: as Motley Fool concludes, sustained ~50% growth over several years could make SOUN a “steal” Nasdaq.

Sources: Official SoundHound press releases and financial reports Soundhound Soundhound Soundhound, financial news articles (Nasdaq/Motley Fool, InsiderMonkey, TipRanks, etc.) Nasdaq Insidermonkey Nasdaq, and financial data sites Stockanalysis Tradingview Stockanalysis. These provide the above figures and commentary.

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