SoundHound Stock Down 29% in a Month: Buy the Dip or Avoid Premium?

SoundHound AI SOUN stock has plunged 28.7% over the past month, significantly underperforming the Zacks Computers – IT Services industry, which declined 12.3%, the broader Zacks Computer and Technology sector, down 2.1%, and the S&P 500, which slipped 0.9%. The stock now trades around $8.25 as of Feb. 10, 2026, well below its 52-week high of $22.17 and not far above its $6.52 low.

SOUN’s 1-Month Share Price Performance

The sharp pullback has also weakened the technical setup, raising the question: Is this simply a reset in an AI growth name, or a warning sign?

Technical Breakdown Adds Near-Term Pressure for SOUN Stock

The chart below shows that SOUN is currently trading below both its 50-day and 200-day simple moving averages. The 50-day SMA stands at $10.63, while the 200-day SMA is at $12.43, compared with the current price of $8.25.

This gap is meaningful. The stock is roughly 22% below its 50-day average and about 34% below its 200-day average, signaling sustained selling pressure rather than a short-term dip. The 200-day line had been trending higher through much of 2025, reflecting prior momentum, but the recent breakdown suggests sentiment has turned cautious. Volume trends in the chart also show elevated activity during the decline, reinforcing that institutional selling may have contributed to the move.
 

From a technical perspective, the stock needs to reclaim the $10–$11 range to stabilize momentum. Until then, near-term volatility is likely to persist.

SOUN’s Q3 Results Highlight Strong Revenue Momentum

Despite the technical weakness, fundamentals remain intact. In the third quarter of 2025, SoundHound reported record revenues of $42 million, up 68% year over year. For the first nine months of 2025, revenue reached $114 million, up 127%, and management raised its full-year 2025 outlook to $165–$180 million.

Liquidity remains solid. The company ended the third quarter with $269 million in cash and no debt, giving it flexibility to continue investing in product innovation and enterprise expansion.

The Zacks Consensus Estimate for 2026 revenue implies growth of 38.3%, while the expected loss per share of 6 cents marks a meaningful improvement from the year-ago estimated loss of 15 cents. Importantly, earnings estimates have remained unchanged over the past 30 days, suggesting analysts have not materially downgraded forward expectations despite the stock’s decline.

SOUN Earnings Estimate

Expanding Agentic AI and Voice Commerce

SoundHound continues to deepen its agentic AI footprint. At CES 2026, the company unveiled expanded agentic voice commerce capabilities for vehicles and TVs, enabling AI agents to order food, make reservations, pay for parking and book tickets. This positions SoundHound beyond a voice interface provider and into transaction enablement.

The partnership with Parkopedia integrates access to more than 90 million parking spaces, allowing drivers to search, reserve and pay for parking entirely by voice. Meanwhile, the OpenTable collaboration enables in-vehicle restaurant reservations across a network of more than 60,000 restaurants. The TomTom partnership adds multi-agent AI voice navigation for vehicles.
These partnerships expand the monetization surface area. If voice commerce scales meaningfully in 2026 and beyond, it could add incremental high-margin revenue streams layered on top of licensing and SaaS contracts.

Diversification Beyond Automotive of SoundHound

While automotive softness has weighed on sentiment, SoundHound has significantly diversified its revenue base.

On the third quarter of 2025 call, management noted that all three pillars grew double digits, with enterprise AI and restaurants contributing meaningfully. The company is now processing more than one billion queries per month, nearly 10X the level at the time of going public.

Enterprise AI, particularly in customer service and contact centers, remains a major opportunity. SoundHound’s Amelia platform and Agentic+ framework aim to move AI use cases from pilot to production more quickly, addressing a key pain point in enterprise adoption.

SOUN’s Challenging Factors

Even with strong revenue growth, risks remain. First, profitability is still developing. Third-quarter 2025 GAAP net loss was significant, though non-GAAP metrics were narrower. Management has indicated that as it exits 2025 and enters 2026, hyper growth is expected to be coupled with a breakeven profitability profile. Execution will be critical.

Second, automotive remains sensitive to broader industry conditions and tariff-related pressures. Although diversification reduces reliance on auto, it is still a meaningful contributor.

Third, the stock still trades at 14.57X forward 12-month price-to-sales, modestly above the industry average of 13.85X. While below its three-year median of 18.13X, it remains a premium multiple for a company that has yet to deliver sustained profitability.

SOUN’s Valuation – P/S (F12M)

Finally, the technical breakdown below both the 50-day and 200-day moving averages adds a layer of near-term risk. In high-growth AI names, technical momentum often amplifies price swings.

How Competitors Frame the SOUN Debate

Three key competitors help frame the investment case for SoundHound: C3.ai AI, Palantir Technologies PLTR and LivePerson LPSN.

C3.ai operates as an enterprise AI application provider, targeting large-scale digital transformation projects. The company competes with SoundHound in enterprise AI deployments, particularly where generative AI and workflow automation intersect. However, C3.ai focuses more on broad enterprise software platforms, while SoundHound emphasizes voice-first and conversational interfaces. Still, C3.ai sets a valuation and execution benchmark for AI-native software players. 

Palantir Technologies competes at the high end of enterprise AI and government analytics. The company benefits from strong government contracts and deep data integration capabilities. While Palantir Technologies is not voice-centric, its expanding AI platform overlaps with SoundHound’s enterprise ambitions.

LivePerson competes more directly in conversational AI and customer engagement. The company targets contact centers and messaging automation, similar to SoundHound’s enterprise AI push.

Tailwinds Remain Intact for SOUN Stock

Despite the selloff, structural drivers remain compelling. Enterprise AI adoption continues to accelerate, especially in customer service automation. SoundHound’s hybrid architecture and proprietary Speech-to-Meaning stack differentiate it from competitors and allow deployment across cloud, edge and hybrid environments.

The $269 million cash balance provides a cushion to support continued innovation and integration of acquisitions. Revenue growth remains robust, guidance was raised, and the Zacks Consensus Estimate expects a strong top-line expansion into 2026.

Voice commerce, showcased at CES and supported by new partnerships, adds an additional growth vector that was not part of the original automotive-only narrative.

Buy the Dip?

SoundHound’s 29% one-month decline reflects a combination of technical weakness and broader AI stock volatility rather than a collapse in business fundamentals. Revenue growth remains strong, guidance has been raised, cash reserves are solid and enterprise traction continues.

However, the stock is trading well below key moving averages, profitability has not yet been achieved and competition in AI remains intense.

For long-term investors comfortable with volatility, the reset in valuation and sentiment may offer a more attractive entry point.

With a Zacks Rank #2 (Buy), SoundHound appears positioned for upside if execution remains strong and enterprise AI momentum continues. The dip may not remove risk, but it has lowered expectations and brought valuation closer to historical norms, making it worth serious consideration for growth-focused investors. 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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