SoundHound AI (NASDAQ: SOUN) has experienced a sharp downturn in 2025, with its stock plummeting over 53% year-to-date and trading below $10. This significant drop follows a stunning 835.9% rally in 2024, largely driven by Nvidia’s (NASDAQ: NVDA) investment in the company. However, Nvidia’s complete divestment of its stake, coupled with macroeconomic uncertainties and a previously stretched valuation, has led to a steep correction.
Now, all eyes are on SoundHound AI’s upcoming fourth-quarter earnings report, set for release on Thursday, February 27. A strong performance and optimistic guidance from management could help stabilize the stock and restore investor confidence. On the other hand, any signs of slowing growth or weaker-than-expected results could further pressure shares, given the market’s heightened sensitivity to AI-related stocks.
SoundHound AI Poised for Strong Q4 Revenue Growth
Despite the recent sell-off, SoundHound AI’s fundamental growth story remains intact. The company’s voice AI solutions are gaining traction across various industries, including automotive, hospitality, customer service, and restaurants.
For the first nine months of 2024, SoundHound reported revenue of $50.15 million. The company has projected full-year revenue between $82 million and $85 million, implying that Q4 revenue could range from $31.85 million to $34.85 million. This represents an impressive year-over-year growth of approximately 86% to 104%.
Expansion Across Key Sectors and Growth Prospects for 2025
Looking ahead, SoundHound AI is well-positioned to sustain its momentum. The company is aggressively expanding its footprint across key sectors such as automotive, AI-powered virtual agents, and the restaurant industry. Recent acquisitions have further bolstered its product offerings, creating new revenue synergies and cross-selling opportunities.
For 2025, SoundHound AI has set an ambitious revenue target between $155 million and $175 million. Strong demand for AI-driven voice solutions suggests the potential for an upward revision in this guidance, which could serve as a key catalyst for the stock.
Additionally, SoundHound’s cumulative subscription base and bookings backlog remain robust, reflecting strong customer retention and increasing enterprise adoption. The company’s deepening ties within the automotive sector and expanding restaurant partnerships provide a solid foundation for long-term growth.
Strategic Diversification and Profitability Outlook
Beyond its core sectors, SoundHound is actively exploring new verticals, including energy, retail, financial services, banking, healthcare, and insurance. This diversification reduces reliance on large one-time contracts, mitigates customer concentration risk, and strengthens the company’s revenue base.
Operationally, SoundHound is optimizing costs while maintaining its growth trajectory. Efficiency improvements and strategic portfolio adjustments are expected to drive margin expansion. If executed successfully, these initiatives could position SoundHound AI to achieve adjusted EBITDA profitability by the end of 2025.
Is SoundHound AI Stock a Buy Ahead of Earnings?
Wall Street analysts currently maintain a “Moderate Buy” rating on SOUN stock. With its recent correction, SoundHound now trades at a more attractive valuation relative to its growth potential. The company’s expanding market presence, strong revenue pipeline, and focus on operational efficiency enhance its long-term investment appeal.
As investors await SoundHound’s Q4 earnings, a strong report and positive guidance could serve as a much-needed catalyst for the stock. Whether the company can regain momentum will depend on its ability to deliver on growth expectations and reassure investors of its path to profitability.
