Key Takeaways
- SoundHound AI shares fell 15% in the past week to a new 52-week low.
- The selling looks overdone. Nvidia’s CEO crisis caused most of the drop, and SoundHound trades near its lowest sales multiple in three years.
- Third-quarter revenue hit a record, but losses got bigger, and the company doesn’t expect positive adjusted EBITDA until the second half of 2027.
- The fourth-quarter report has to show more than $80 million of cost cuts taking effect.
SoundHound AI (SOUN) is down 15% in the past week to a new 52-week low, while the Nasdaq 100 rose 6%. Its own third-quarter report started the slide, and most of the rest came from the crisis at Nvidia (NVDA).
Record revenue, bigger losses
In its Nov. 5 report, SoundHound said third-quarter revenue rose 48% to a record $62.4 million. But non-GAAP gross margin fell to 50.3% from 59.3% a year earlier, and the adjusted EBITDA loss grew to $20.7 million from $14.5 million. That misses the bar TIKR’s preview set for the quarter: losses shrinking in dollars.
Part of that is on purpose. CFO John Collins said SoundHound is “shifting upfront license deals to hosted structures and exiting non-core, dilutive business lines.” That costs revenue now, so 2026 guidance is $250 million to $260 million. Positive adjusted EBITDA won’t come until the second half of 2027.
Analysts’ estimates now sit inside the guidance, at $255 million for 2026 and $379 million for 2027:
Then Nvidia’s CEO quit
On Nov. 9, President Donald Trump said the FBI was looking into Nvidia CEO Jensen Huang’s relationship with a suspected Chinese spy. Speculative AI stocks fell the next day. On Nov. 12, Nvidia said Huang had resigned, effective immediately. Riskier AI names, SoundHound included, sold off.
TIKR tracks 8 analysts on SoundHound AI. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on SoundHound AI, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See SoundHound AI’s Analyst Ratings
Cheap, but the cuts have to show up
At 5.4x forward sales on Nov. 11, SoundHound traded near its lowest multiple in three years. Its three-year average is 20x:
The Nov. 12 drop took it lower still.
The risk is cash. SoundHound burned $96.0 million in operations over the first nine months of the year, and it had $207.6 million of cash on Sept. 30. Its share count rose 16% over those nine months.
Still, I think the selling is overdone: at about 5x sales, the stock is priced for a lot to go wrong. The fourth-quarter report, due early next year, needs to show the more than $80 million of cost cuts landing and losses finally shrinking. If it does, a multiple this low is hard to justify.
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!
