Can Enterprise AI Offset Automotive Pressure for SoundHound in 2026?

SoundHound AI, Inc. (SOUN) enters 2026 facing a familiar tension between near-term automotive pressure and accelerating enterprise momentum. While the company has historically relied on automotive partnerships to validate its voice AI technology at scale, that segment is proving less predictable in the current environment. As investors look ahead, the central question is whether expanding enterprise adoption can offset softness in automotive and sustain SoundHound’s broader growth trajectory.

The automotive business introduces added complexity. The company has acknowledged that global tariffs and broader industry softness continue to weigh on automotive revenues, creating near-term headwinds. Automotive programs are typically tied to long development cycles, OEM production schedules and macro conditions, making growth more volatile compared with software-led models. As a result, visibility in this segment remains uneven, even for well-established deployments.

That said, the company expects improvement as voice commerce initiatives and next-generation automotive deployments scale into 2026. While this offers a potential recovery path, the timing remains uncertain, reinforcing the importance of diversification beyond auto-centric revenue streams.

Against this backdrop, enterprise AI has emerged as a critical offset. As the Agentic+ framework becomes central to customer-experience transformation, enterprise demand is scaling across multiple verticals. In the third quarter of 2025, revenues grew 68% year over year to $42 million, driven by expanding deployments in financial services, healthcare, insurance, telecom and retail. These enterprise use cases benefit from subscription-style economics, faster deployment cycles and clearer ROI, improving revenue durability.

Looking ahead, enterprise AI provides SoundHound with a more resilient growth engine. While automotive recovery may take time, strengthening enterprise adoption positions the company to enter 2026 with an improved balance between cyclical and recurring demand.

Competition Intensifies as Rivals Scale Their AI War Chests

In the race to dominate conversational and agentic AI, C3.ai (AI) and Cerence (CRNC) remain two of SoundHound’s most persistent competitors, and both are aggressively expanding their capabilities. C3.ai has been pushing deeper into enterprise AI automation, making it a frequent point of comparison as enterprises evaluate large-scale deployments. The expanding product suite keeps it in direct contention with SoundHound for contracts across financial services, energy and government, ensuring C3.ai stays consistent in competitive deal cycles.

Meanwhile, Cerence continues to fortify the automotive AI footprint, making it a recurring competitor in in-vehicle voice systems and OEM partnerships. As EV makers and global automakers modernize infotainment platforms, Cerence often appears alongside SoundHound in shortlists. Moreover, CRNC maintains strong legacy relationships that keep it entrenched in key accounts.

SOUN’s Price Performance, Valuation and Estimates

SoundHound’s shares have lost 54.1% in the past year compared with the Zacks Computers - IT Services industry’s 17.2% decline. SOUN stock has lagged the broader Computer and Technology sector and the S&P 500, as shown below.

SOUN's Price Performance

In terms of its forward 12-month price-to-sales ratio, SOUN is trading at 18.62, up from the industry’s 15.49.

SOUN's Valuation

Over the past 30 days, the Zacks Consensus Estimate for SOUN’s 2026 loss per share has remained unchanged at 5 cents. The estimated figure indicates a whopping 63.8% improvement on a year-over-year basis.

SOUN currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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