Key Takeaways
- SoundHound AI stock fell 21.6% in the past month (through Monday’s close) and is down 53% in 2026, while the S&P 500 rose 0.6% over the month.
- The selling tracks a growing share count: the LivePerson deal was paid for in stock, and the company sold more shares while free cash flow missed estimates four quarters in a row.
- Even the lowest analyst targets, Piper Sandler’s $6 and Yorkville Ives’ $6.50, are above Monday’s $4.65 close.
- The third-quarter report is the first with LivePerson and is due in the coming weeks. It should show whether the cash burn is turning.
SoundHound AI (SOUN) stock is down 21.6% in the past month (through Monday’s close). Over the same stretch the S&P 500 rose 0.6% and the Nasdaq 100 slipped 0.4%. It’s now down 53% in 2026 (through Monday’s close) and 77% from its 52-week high.
And its worst days came with no news from the company at all.
What exactly happened
- Sept. 22: Piper Sandler’s James Fish cut his price target to $6 from $7 and kept a Neutral rating, after the LivePerson deal closed.
- Early October: Yorkville Ives, Daniel Ives’ new firm, started coverage at Hold with a $6.50 target.
- Oct. 12: The stock fell 7.8% to fresh lows while software stocks barely moved. A law firm, Kahn Swick & Foti, announced an investigation of SoundHound’s officers and directors, but not until 12:39 p.m., halfway through the session.
- Oct. 14: Down another 7.2%, with nothing from the company but a car-assistant launch in India.
- Oct. 15: Up 8.0% as AI-linked software stocks rallied broadly, which won back about a third of the month’s fall.
Software held up while SoundHound slid, so the problem is SoundHound’s own.
See analyst ratings on SoundHound AI (it’s free):
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The share count is the problem
The trouble started before the month did. On Sept. 4, SoundHound closed its purchase of LivePerson, paid for mostly in its own shares.
“This merger represents a defining moment for the new agentic AI era,” said CEO and co-founder Keyvan Mohajer.
Maybe. But SoundHound’s shareholders are paying for it. LivePerson’s noteholders alone received 36.9 million SoundHound shares, about 8% of the count before the deal. Meanwhile, LivePerson’s revenue fell 11.9% to $52.5 million in its second quarter.
And LivePerson isn’t where the dilution started. SoundHound’s diluted share count has climbed every year since 2021…
…about six times over in four years, before any of the LivePerson shares show up.
Those share sales pay for the cash burn. In the second quarter of 2026, SoundHound sold 6.2 million shares through its at-the-market program for $47.5 million. That quarter’s free cash flow came in at -$34.1 million against a -$23.8 million estimate. It was the company’s fourth straight free cash flow miss, even as revenue beat consensus five quarters running.
Free cash flow has been negative in every year on the chart.
And the burn has grown since then: -$115.9 million over the four quarters through June 2026.
The third quarter is the test
SoundHound hasn’t set a date, but its third-quarter report should land in the coming weeks. It’s the first quarter with LivePerson in the numbers, and it may bring the updated outlook management promised after the deal closed.
The bar is simple: burn less than the second quarter’s $34 million, and do it without selling more stock. If the burn widens and the company sells more stock to cover it, the sellers had it right.
Analysts don’t expect a quick fix. Consensus has 2027 revenue near $390 million, but free cash flow still negative through 2028: about -$84 million in 2027 and -$59 million in 2028.
Cheap on its own history, but I’d wait
On TIKR’s data, SoundHound looks cheap. It trades at 5.7x forward sales, near its three-year low of 5.5x from Oct. 14. Its three-year average is 20.3x, and it peaked at 61.7x in December 2024.
(That 5.7x may flatter it, since TIKR’s share count may not yet include the stock issued for LivePerson.)
The Street sees upside too. As of Sept. 30, the mean target was about $13, with six Buys and two Holds. Even the lowest targets, Piper’s $6 and Ives’ $6.50, are above Monday’s $4.65 close.
But every new share sale shrinks each holder’s slice of that future revenue, and the burn hasn’t turned yet.
My take: I wouldn’t load up here. I’d wait for the third quarter to show the cash burn shrinking without new stock sales. Of course, if SoundHound does pull that off at 5.7x sales, today’s price could look like a bargain in a hurry.
So what is SoundHound AI stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
