When Will SoundHound AI's Stock Return to Its High of $24?

SoundHound AI (NASDAQ: SOUN) was a massive winner in 2024. But it has been one of the biggest losers of 2025, with the stock now down around 70% from its all-time high established in late December. The stock used to trade for slightly more than $24 but now can be purchased for around $7 at the time of this writing.

SoundHound AI has a long way to go before returning its stock to all-time highs, but could it get back there over time? Let's take a look.

SoundHound has been sold off alongside its AI peers

SoundHound AI has been slammed in the recent stock market sell-off because of its association with high-growth AI stocks, which isn't a mistake.

It is indeed a high-growth AI stock, and it's still building out its client base. The company is also unprofitable, causing Wall Street to deem it risky.

As investors move their money from aggressive investments to more conservative ones, this can open up lucrative buying opportunities for long-term growth investors. But is that the case for SoundHound AI?

The company's niche in the AI space is voice recognition. With its platform, clients can use audio inputs for AI models. Right now, most generative AI models are prompted using a keyboard, but that's not always practical -- like while driving, or ordering at a drive-thru. So these are some of the top uses for SoundHound's software.

The company's growth as its use cases have expanded has been phenomenal. In the fourth quarter, revenue grew 101% to $34.5 million. That elevated rate is expected to continue in 2025, and management believes it can generate between $157 million and $177 million in sales, for 97% growth. Those projections were given before tariffs rocked the economy, and SoundHound's future growth may not reach the levels management predicted.

However, it's incredibly important to continue rolling out AI products to remain competitive. And SoundHound AI can help automate some functions traditionally done by a person taking a phone call or a drive-through order. Integrating its software could add another layer of efficiency to a business, which is key amid a difficult economy.

Overall, I think the company will be just fine over the next few years, but does that make the stock a buy at this price point?

SoundHound faces a long road to return to $24 per share

Part of the issue with SoundHound's $24 price tag was the growth expectations built into the stock. At the peak, shares traded for more than 110 times sales.

SOUN PS Ratio data by YCharts; PS = price to sales.

Those are incredibly lofty expectations that no stock can live up to (unless it's growing its revenue at a ludicrous speed), and it was bound to sell off from those levels. Now, 30 times sales is still expensive; most software companies trade between 10 and 20 times sales. Then again, most software companies aren't projecting to double their revenue over the next year.

Looking at the stock price, I think it's safe to assume that 2025 growth has already been baked into the valuation and that the current price tag is a solid reflection of where a fairly valued stock would be at the start of 2026. After that, the price will likely rise alongside the company's revenue growth, which means it would need sales to more than triple on top of the massive growth management expects for 2025.

That's a tall task, and its shares may not reach the $24 level for some time. Still, new buyers can get a great deal on the stock if it continues to sell off. Should the stock get into the 20 times sales range and management not reduce its guidance too much, it will be an absolute steal and should provide great returns. Mind you, I'm talking about either dramatic revenue growth or a 30% price drop from here.

As a result, I think investors should be patient with SoundHound AI's stock because it could still fall further, depending on how the markets react to more tariff news. But if it exceeds expectations for 2025 and gives strong 2026 guidance, don't be surprised if the stock turns into a rocket ship again.

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Keithen Drury 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.