Innovative voice artificial intelligence (AI) company Soundhound AI Investor 
Soun Over the past year, the stock has been well rewarded as it has outperformed the broader market with a 172% rally. However, Catalyst has recently stopped the soundhound outperformance on that track.
Recent Submissions by Chip Giant Nvidia 
NVDA On February 14, the company announced that it had sold its entire shares of the company. Since then, the company’s shares have been in a free fall, adjusting 32% from its February 13th closing price.
About Sound Hound Stock
Founded in 2005, Soundhound AI uses voice AI technology and specializes in speech recognition, natural language processing, and speech-to-meaning technology. The company operates in a variety of industries and offers AI-driven solutions that enable companies to integrate sophisticated audio capabilities into their products and services.
The company currently has a market capitalization of $4.3 billion, and its share price has fallen significantly by 48% since the start of the year.
So, did Nvidia’s sales guarantee such a harsh response to the company’s stock? I don’t think so – and this is why.
Soundhound boasts solid fundamentals
In the most recent quarter, we narrowed our losses to $0.06 per share, compared to the previous year’s $0.09 per share. That loss is narrower than consensus estimates, with revenues rising significantly by 89% from the previous year to $25.1 million.
In particular, the company significantly improved its customer intensive metrics in the third quarter. The company has diversified its customer base significantly, with its biggest clients currently accounting for just 12% of its total revenue, a sharp decline from 72% the previous year. This shift highlights the company’s growing customer portfolio and reduces its reliance on a single source of income.
The total margin was revised from a difficult level of 73.7% the previous year, but still an impressive 59.7%.
Soundhound also strengthened its cash balance in the quarter, which closes at $136 million compared to $95.3 million at the start of 2024. Cash balances were far higher than the company’s short-term debt level of $19.6 million.
Soundhound has increased its 2025 revenue guidance to the $175 million range from previous forecasts of over $150 million.
The main drivers of soundhound growth
Soundhound AI stands out as a leader in the voice AI sector in the Quick Service Restaurant (QSR) industry, with its technology currently being used in over 10,000 restaurants. We also secured partnerships with seven of the top 20 QSR brands. The company’s phone ordering system alone handles interactions with over 100 million customers and shows the scale and impact of its technology. Soundhound’s US roster includes the most notable names in the food industry, including Panda Express, Church Texas Chicken, White Castle, Appleby, Casey, and Five People.
The company’s competitiveness in the QSR sector is its extensive integration, combining all of its competitors. Establishing a dominant position early on has proven to be a key strategy for success, with the early leads of Soundhound in favor of continuing growth in this market It’s been done.
In addition to advancements in the QSR space, Soundhound has also made significant advances in the automotive sector. Recent partnerships with Lucid Motors 
lcid It highlights the possibilities in this high-growth area. Earlier this year, Soundhound launched its first in-vehicle Voice Commerce platform, marking a key milestone in the car effort. The company’s automotive portfolio is expanding rapidly, trading not only in the US but also in emerging markets such as China and India. The integration of its multilingual capabilities and generational AI was important to ensure these international agreements.
Additionally, Soundhound’s unique AI model, Polaris offers a considerable competitive advantage. Developed over 20 years, Polaris was trained using billions of human conversations and over a million hours of speech in a wide range of languages. This sophisticated model is excellent at understanding speech, contextual information, and user intent, making it ideal for a wide range of industries. Efficiency in terms of hosting costs further distinguishes Soundhound as Polaris was developed in-house and contributed to a lower cost infrastructure compared to competing technologies.
Additionally, Soundhound has established itself as a key player in the smart answering service space, especially for small and medium-sized businesses (SMBs). The company has already established a strong presence, with its services deployed in over 1,000 locations. This segment alone could evolve into a global business worth hundreds of billions of dollars, with a scalable, low-touch business model.
Overall, Soundhound’s competitive moat is built on proprietary technology, cost-effective in-house models, a robust patent portfolio, and over 20 years of industry experience. The company’s sustainable leadership in multiple high-growth sectors has made it an attractive player in the AI field.
Analyst’s opinion
Analysts are cautiously optimistic about the stock, attributing an overall rating of “medium buy” with an average target price of $13.25. This indicates a potential rise of around 28% from current levels. Of the six analysts covering stocks, four have a “strong buy” rating, while two have a “hold” rating.
On the date of publication, Pathikrit Bose had no position (directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. For more information, see BarChart’s disclosure policy Here.
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