SoundHound AI (NASDAQ:SOUN) Shares Gap Up – Should You Buy?

SoundHound AI, Inc. (NASDAQ:SOUN) shares gapped up prior to trading on Thursday . The stock had previously closed at $6.43, but opened at $8.05. SoundHound AI shares last traded at $7.2060, with a volume of 26,492,371 shares.

More SoundHound AI News

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

• Positive Sentiment: Record revenue and earnings beat: Second-quarter revenue rose 45% year over year to $61.9 million, well above the approximately $42.6 million consensus estimate. The adjusted loss of $0.02 per share also beat expectations, while profitability metrics and margins improved. SoundHound Q2 Earnings Beat on OASYS Demand, Revenues Top, Stock Up
• Positive Sentiment: Higher full-year outlook: SoundHound raised its 2026 revenue floor, citing OASYS-driven enterprise adoption, faster deal conversions and broader customer demand. Management also emphasized continued margin improvement despite ongoing investment. SOUN Raises 2026 Revenue Outlook After OASYS Drives Record Q2 Sales
• Positive Sentiment: Potential strategic catalyst: Proxy adviser Glass Lewis recommended that LivePerson stockholders vote in favor of the proposed transaction with SoundHound at the August 20 special meeting, supporting the planned expansion of SoundHound’s conversational-AI capabilities. Glass Lewis Recommends LivePerson Stockholders Vote For SoundHound AI Transaction
• Positive Sentiment: Trading momentum: Heavy call-option activity and high short interest may be amplifying the post-earnings move as bullish traders participate and short sellers cover positions.
• Neutral Sentiment: Analyst support is mixed: DA Davidson maintained a Buy rating while lowering its price target from $12 to $10. Piper Sandler cut its target from $8 to $7 and retained a Neutral rating.
• Negative Sentiment: Valuation and financial risks: Analysts note that SOUN remains expensive relative to sales, with projected 2026 growth needing to justify the premium. The company continues to report losses and cash burn, while potential dilution and execution risks could limit further upside. SOUN Dips 16.9% in 3 Months

Analysts Set New Price Targets

Several brokerages recently commented on SOUN. Piper Sandler dropped their price target on shares of SoundHound AI from $8.00 to $7.00 and set a “neutral” rating for the company in a research report on Thursday. Weiss Ratings reiterated a “sell (e+)” rating on shares of SoundHound AI in a report on Monday, June 15th. DA Davidson decreased their price target on shares of SoundHound AI from $12.00 to $10.00 and set a “buy” rating on the stock in a report on Thursday. Finally, LADENBURG THALM/SH SH raised shares of SoundHound AI to a “strong-buy” rating in a research note on Wednesday, May 6th. One equities research analyst has rated the stock with a Strong Buy rating, four have assigned a Buy rating, three have assigned a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, SoundHound AI presently has a consensus rating of “Moderate Buy” and an average target price of $14.00.

SoundHound AI Trading Up 13.3%

The stock’s 50-day moving average is $6.79 and its 200-day moving average is $7.61. The stock has a market cap of $3.47 billion, a price-to-earnings ratio of -21.10 and a beta of 2.64.

SoundHound AI (NASDAQ:SOUN) last announced its quarterly earnings results on Tuesday, August 4th. The company reported ($0.10) earnings per share for the quarter, beating analysts’ consensus estimates of ($0.13) by $0.03. SoundHound AI had a negative net margin of 67.45% and a negative return on equity of 31.06%. The firm had revenue of $61.90 million for the quarter, compared to analysts’ expectations of $52.38 million. During the same period in the previous year, the company posted ($0.19) earnings per share. SoundHound AI’s revenue was up 45.0% compared to the same quarter last year. On average, equities analysts predict that SoundHound AI, Inc. will post -0.45 earnings per share for the current fiscal year.

Insider Buying and Selling at SoundHound AI

In related news, insider James Ming Hom sold 28,843 shares of the company’s stock in a transaction on Monday, June 15th. The shares were sold at an average price of $7.46, for a total transaction of $215,168.78. Following the completion of the sale, the insider directly owned 743,521 shares of the company’s stock, valued at approximately $5,546,666.66. This represents a 3.73% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, COO Michael Zagorsek sold 64,994 shares of the stock in a transaction dated Monday, June 15th. The shares were sold at an average price of $7.46, for a total value of $484,855.24. Following the completion of the sale, the chief operating officer owned 1,669,497 shares of the company’s stock, valued at approximately $12,454,447.62. This trade represents a 3.75% decrease in their position. 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. In the last three months, insiders have sold 268,022 shares of company stock worth $1,999,444. Corporate insiders own 8.84% of the company’s stock.

Institutional Investors Weigh In On SoundHound AI

Large investors have recently added to or reduced their stakes in the company. Danske Bank A S purchased a new position in SoundHound AI in the 3rd quarter valued at about $26,000. Northwestern Mutual Wealth Management Co. increased its position in shares of SoundHound AI by 83.1% during the second quarter. Northwestern Mutual Wealth Management Co. now owns 2,336 shares of the company’s stock worth $25,000 after acquiring an additional 1,060 shares during the last quarter. Dogwood Wealth Management LLC lifted its stake in shares of SoundHound AI by 152.1% in the fourth quarter. Dogwood Wealth Management LLC now owns 2,559 shares of the company’s stock worth $26,000 after acquiring an additional 1,544 shares in the last quarter. SHP Wealth Management acquired a new position in shares of SoundHound AI in the fourth quarter worth about $27,000. Finally, Parallel Advisors LLC boosted its holdings in SoundHound AI by 42.8% in the third quarter. Parallel Advisors LLC now owns 3,204 shares of the company’s stock valued at $52,000 after purchasing an additional 960 shares during the last quarter. 19.28% of the stock is owned by institutional investors and hedge funds.

About SoundHound AI

SoundHound AI, Inc is a voice AI and conversational intelligence company specializing in speech recognition, natural language understanding and sound identification technologies. Founded in 2005 and headquartered in Santa Clara, California, the company initially gained recognition with its music discovery app before pivoting to enterprise-grade voice AI solutions. Over the years, SoundHound AI has built a comprehensive platform that enables developers and businesses to embed conversational intelligence into a wide range of products and services.

The company’s core offering is the Houndify voice AI platform, which provides customizable speech-to-meaning technology, domain-specific natural language understanding and text-to-speech capabilities.