After losing substantial value from its high, shares of SoundHound AI (SOUN) are finally showing signs of life. Despite being down roughly 42% year-to-date, SOUN stock has recovered swiftly, surging more than 38% over the past month. The stock further gained momentum from renewed investor confidence amid an improving macroeconomic environment.

While the company’s latest Q1 results failed to boost SOUN stock, the quarter had several positives, which indicates that the company could continue to deliver significant growth in the coming quarters.            

In Q1, SoundHound reported revenue of $29.1 million, marking a solid 151% increase compared to the same period last year. This acceleration is noteworthy, as it tops the impressive 101% year-over-year growth the company achieved in the fourth quarter of 2024. This shows that momentum is building in SoundHound’s business.

Several factors are driving this growth. The company continues to lead in the voice AI space, thanks to its focus on product innovation and an expanding market for its technology. SoundHound’s solutions are being adopted across various industries, from automotive to hospitality, broadening its customer base and enhancing its growth potential.

Looking ahead, the highest price target on Wall Street for SOUN stock is $26, reflecting 120% upside from current price levels. While achieving this target would require substantial growth, SoundHound’s leadership in voice AI solutions and strategic acquisitions position it well to capitalize on the expanding demand.

Moreover, the broader market backdrop could provide additional tailwinds. Improving trade relations between the U.S. and China fosters a more positive sentiment among investors, which might further support SOUN’s upward trajectory.

SoundHound Stock Poised for Strong Upside

SoundHound is poised to deliver significant growth in coming quarters with its generative and agentic AI and voice commerce platforms gaining traction. The company continues to attract new customers, with bookings growing steadily, marking a double-digit increase compared to last year. This momentum shows that SoundHound’s solutions are resonating across industries.

One of the most promising developments is the diversification of SoundHound’s revenue streams. SOUN’s management stated that no single customer accounted for more than 10% of its top line in Q1. This marks a significant shift from past dependency on large accounts and reduces overall business risk. It also highlights how the company’s addressable market is expanding, particularly in areas like customer service, where growth has been impressive. Location expansions in the restaurant sector and broader enterprise adoption are key drivers of this success.

SoundHound’s generative AI solutions are also gaining traction in the automotive sector, where its partnerships with original equipment manufacturers (OEMs) continue to grow. SoundHound’s voice commerce offerings are seeing solid customer interest from the auto and restaurant sectors, positioning the company well for further growth.

Another bright spot is SoundHound’s progress from recent acquisitions, including SYNQ3, Amelia, and Allset. These deals have added valuable technology and are opening up significant opportunities for cross-selling and upselling. Management expects these synergies to translate into greater operational efficiency and accelerated growth throughout 2024.

SoundHound is ramping up its efforts to boost brand visibility and generate demand. The company anticipates that these initiatives will lead to better sales performance and customer retention. Encouragingly, the move is driving its sales pipeline and improving close rates.

Looking ahead, SoundHound’s leadership remains optimistic about the company’s growth trajectory. Management has reaffirmed its 2025 revenue guidance of $157 million to $177 million, reflecting an 85% to 109% year-over-year increase. At the same time, the company is committed to improving its cost structure and achieving adjusted EBITDA profitability by the end of 2025.

The Bottom Line

Wall Street maintains a “Moderate Buy” consensus on SOUN stock. However, SoundHound’s leadership in voice AI, expanding total addressable market, and the potential cross-sell and upsell opportunities position it well to deliver significant growth.

While it has lost considerable value year-to-date, the ongoing momentum in its business will enable SOUN stock to recover a significant portion of the lost ground.