Will Restaurant AI Help SoundHound Scale Profitably?

SoundHound AI, Inc. SOUN is notably benefiting from restaurant operators shifting toward AI solutions from legacy answering systems. The demand for AI solutions is not only limited to food ordering services but is also expanding to services such as table reservations and prepaid parking.

When discussing AI solutions for restaurants, SOUN’s next-generation voice commerce solution brightens the screen. This voice-powered AI solution creates a seamless, hands-free order experience across cars, drive-thrus, phones, kiosks and more, giving it a competitive edge over its market peers. This creative edge is enabling it to expand voice commerce to OEMs (Original Equipment Manufacturers) outside of its existing network and beyond food ordering services. As of March 31, 2025, SoundHound AI had more than 15 large restaurant chains entwined in its network, with it grabbing opportunities from partners signing up for reservations and parking services as well. In the first quarter of 2025, SOUN scaled and reached thousands of locations by expanding its partnership with one of the United States’ largest pizza chains for its phone answering and AI solutions.  

Catalyzing SOUN’s growth further was the acquisition of Synq3, Inc. in January 2024. Synq3’s solutions, like Smart Answering and Employee Assist, amalgamated with SoundHound AI’s voice-powered AI solutions, introduce restaurant partners and customers to an innovative and advanced technology for improved ordering accuracy. As of March 31, 2025 majority of Synq3’s locations have been upgraded to SOUN’s Polaris model, a multilingual automatic speech recognition (ASR) and foundational voice-AI system.

Currently, the company is undergoing several pilots and POCs with multiple automakers for its voice commerce solution, with being already integrated in many restaurant brands. The robust trends indicate incremental revenue visibility and market share expansion in the long term for SoundHound AI.

Competition in the Voice-Powered AI Solutions Market

SoundHound AI is enjoying a competitive edge over its peers with its next-generation voice commerce solution, but it is not much away from competition in this context. Other renowned market players, including Microsoft Corporation MSFT and Amazon.com, Inc. AMZN, offer noticeable competition in the market to SOUN.

Microsoft, with its Azure OpenAI integrations and Nuance Communications unit, offers substantial restrictions in the market that SoundHound AI operates in. Nuance’s deep roots in healthcare voice automation and conversational AI give Microsoft a strong enterprise footprint, with Azure offering tools for custom enterprise workflows.

On the other hand, Amazon’s voice assistant Alexa Auto seems to be one of the market competitors for SOUN. Amazon’s Alexa Auto leverages its consumer ecosystem to deliver in-car voice functionality. The strength lies in smart home integration and brand familiarity, but OEMs increasingly seek white-labeled, customizable alternatives, an area where SoundHound differentiates.

EPS Trend of SOUN

SOUN’s earnings estimates for 2025 have remained unchanged over the past 60 days at a loss per share of 16 cents. On the contrary, during the said time frame, the earnings estimates of loss per share for 2026 have contracted to five cents.

Earnings Estimate Revision

Even though the company’s earnings estimates for 2025 and 2026 indicate a loss per share, the estimated values indicate 84.6% and 64.1% year-over-year growth, respectively.

SOUN Stock’s Price Performance & Valuation Trend

Shares of this California-based voice AI company have trended upward 23.9% in the past three months, outperforming the Zacks Computers - IT Services industry, the Zacks Computer and Technology sector and the S&P 500 index.

SOUN stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 23.09X, as evidenced by the chart below. The overvaluation of the stock compared with its industry peers indicates its strong potential in the market, given the favorable trends backing it up.

SOUN stock currently carries a Zacks Rank #3 (Hold). 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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