Why Shares of SoundHound Are Soaring Higher This Week

Key Points

• SoundHound reported strong second-quarter 2025 financial results last week.

• An analyst upwardly revised his price target on SoundHound stock on Monday.

• For risk-averse investors, an AI ETF may be a better investment option than SoundHound stock.

• 10 stocks we like better than SoundHound AI ›

After climbing 34% last week, shares of SoundHound AI (NASDAQ: SOUN) are maintaining their upward trajectory. The company reported strong second-quarter 2025 financial results last week, and investors seem intent on continuing to pick up shares of the artificial intelligence (AI) company, while an analyst's optimistic outlook on the stock from earlier this week is contributing to investors' ebullience.

According to data provided by S&P Global Market Intelligence, shares of SoundHound have risen 21.3% from the end of trading last Friday through 3:32 p.m. ET on Thursday.

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An analyst's favorable opinion is music to investors' ears

On Monday, investors learned that they weren't the only ones enthusiastic about SoundHound's Q2 2025 financial results. Ladenburg analyst Glenn Mattson upgraded SoundHound stock to buy from neutral and hiked his price target to $16 from $9. With shares of SoundHound closing at $13.55 last Friday, Mattson's price target implies upside of 18.1%.

According to The Fly, Ladenburg predicates its view on SoundHound on the belief that the company is adding value to companies seeking to integrate AI functionality, and the company is demonstrating strong growth potential in the near term. Last week, SoundHound reported impressive second-quarter 2025 financial results. In addition to revenue growing 217% year over year, SoundHound reported non-GAAP (generally accepted accounting principles) earnings per share of negative $0.03, beating analysts' expectations.

With shares rocketing higher over the past two weeks, is it too late to buy SoundHound stock now?

For innovative companies such as SoundHound, there's often volatility in the stock prices as investors wrestle with the company's growth into a more mature company. The recent rise shouldn't dissuade those interested in SoundHound stock. While notable over the past couple of weeks, shares are still down about 16% since the start of the year as of this writing.

Volatility is sure to continue with SoundHound stock, so those who are looking to gain AI exposure, yet have a low risk tolerance, may be more interested in an AI exchange-traded fund.

Should you invest $1,000 in SoundHound AI right now?

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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.