SoundHound AI (NASDAQ:SOUN) Shares Down 7.8% – Time to Sell?

SoundHound AI, Inc. (NASDAQ:SOUN) shares dropped 7.8% on Monday. The company traded as low as $4.96 and last traded at $4.97. 20,218,903 shares traded hands during mid-day trading, a decline of 26% from the average daily volume of 27,217,262 shares. The stock had previously closed at $5.39.

Key Headlines Impacting SoundHound AI

Here are the key news stories impacting SoundHound AI this week:

• Positive Sentiment: SoundHound launched its real-time generative voice AI in Kia’s Sorento vehicles in India, using its OASYS platform for conversational, hands-free in-car assistance. The deployment is presented as a global and category first, potentially strengthening SoundHound’s automotive credentials and providing a model for future vehicle partnerships. What Could SoundHound AI First In Car AI Launch Mean For Investors?
• Positive Sentiment: The September 2026 completion of the LivePerson acquisition gives SoundHound access to customers that include 25 Fortune 100 companies. Management could use that customer base to expand conversational and agentic AI offerings and accelerate enterprise sales. SoundHound Eyes 25 Fortune 100 Brands
• Neutral Sentiment: The Kia launch is strategically important, but the reports provide limited details on near-term revenue, margins or the number of vehicles involved. Investors therefore still need evidence that automotive deployments can scale into material financial results. SoundHound AI Stock Looks Pricey Despite New India Car AI Launch
• Negative Sentiment: Analysts continue to question SoundHound’s valuation relative to its sales base, particularly after a 51.1% share-price plunge. Persistent operating losses, negative cash flow and uncertainty over the path to profitability make the stock look potentially like a warning sign rather than a bargain. SoundHound Stock Trades at a Discount
• Negative Sentiment: SOUN has fallen substantially while the broader market and enterprise software stocks advanced, suggesting company-specific concerns. Commentary highlights cash consumption, acquisition-integration risks and the contrast with more profitable technology businesses. SoundHound AI Just Dropped 22% in a Month

Analyst Upgrades and Downgrades

Several brokerages have recently issued reports on SOUN. Wall Street Zen cut SoundHound AI from a “sell” rating to a “strong sell” rating in a research report on Saturday, September 26th. DA Davidson cut their price objective on SoundHound AI from $12.00 to $10.00 and set a “buy” rating for the company in a report on Thursday, August 6th. Piper Sandler decreased their target price on SoundHound AI from $7.00 to $6.00 and set a “neutral” rating for the company in a research note on Tuesday, September 22nd. Finally, Weiss Ratings reaffirmed a “sell (e+)” rating on shares of SoundHound AI in a research note on Friday, September 11th. One research analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating, two have assigned a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat, SoundHound AI presently has a consensus rating of “Moderate Buy” and an average target price of $12.75.

SoundHound AI Stock Performance

The company’s 50 day moving average price is $6.49 and its 200-day moving average price is $7.00. The company has a market cap of $2.01 billion, a price-to-earnings ratio of -11.92 and a beta of 2.73.

SoundHound AI (NASDAQ:SOUN) last released its earnings results on Wednesday, August 5th. The company reported ($0.02) EPS for the quarter, beating the consensus estimate of ($0.13) by $0.11. The business had revenue of $61.90 million during the quarter, compared to analyst estimates of $52.38 million. SoundHound AI had a negative net margin of 67.45% and a negative return on equity of 30.22%. The business’s quarterly revenue was up 45.0% on a year-over-year basis. During the same period in the prior year, the business earned ($0.19) earnings per share. As a group, sell-side analysts forecast that SoundHound AI, Inc. will post -0.32 earnings per share for the current year.

Insider Buying and Selling

In other news, COO Michael Zagorsek sold 71,113 shares of the stock in a transaction on Tuesday, September 15th. The stock was sold at an average price of $6.33, for a total transaction of $450,145.29. Following the completion of the sale, the chief operating officer owned 2,600,231 shares in the company, valued at approximately $16,459,462.23. This represents a 2.66% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Keyvan Mohajer sold 137,290 shares of the firm’s stock in a transaction on Tuesday, September 15th. The stock was sold at an average price of $6.33, for a total value of $869,045.70. Following the sale, the chief executive officer directly owned 3,684,947 shares of the company’s stock, valued at approximately $23,325,714.51. This represents a 3.59% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 288,758 shares of company stock worth $1,828,598 over the last quarter. 8.84% of the stock is currently owned by insiders.

Hedge Funds Weigh In On SoundHound AI

A number of institutional investors have recently bought and sold shares of the stock. Swiss National Bank grew its position in SoundHound AI by 3.7% during the 1st quarter. Swiss National Bank now owns 767,100 shares of the company’s stock worth $5,270,000 after purchasing an additional 27,300 shares in the last quarter. California State Teachers Retirement System lifted its holdings in shares of SoundHound AI by 25.0% in the first quarter. California State Teachers Retirement System now owns 440,023 shares of the company’s stock valued at $3,023,000 after purchasing an additional 87,998 shares in the last quarter. AXQ Capital LP boosted its position in shares of SoundHound AI by 395.6% in the second quarter. AXQ Capital LP now owns 254,744 shares of the company’s stock worth $1,648,000 after buying an additional 203,345 shares during the period. SG Americas Securities LLC acquired a new stake in shares of SoundHound AI in the first quarter worth $1,606,000. Finally, Virtu Financial LLC boosted its position in shares of SoundHound AI by 43.9% in the fourth quarter. Virtu Financial LLC now owns 219,773 shares of the company’s stock worth $2,191,000 after buying an additional 67,088 shares during the period. Hedge funds and other institutional investors own 19.28% of the company’s stock.

About SoundHound AI

SoundHound AI, Inc develops voice artificial intelligence technologies that enable people to interact with products and services using natural language. Its platform is designed to understand conversational speech, answer questions, and support voice-enabled experiences across automotive, restaurant, consumer electronics and other industries.

The company’s offerings include the Houndify voice AI platform, which businesses can use to build customized voice assistants, and SoundHound Chat AI, a conversational assistant designed to provide responses and complete tasks through voice interaction.