Soundhound AI: SOUN Stock To $20?
SoundHound AI (NASDAQ: SOUN) witnessed an incredible increase in 2024, rising from $2 to $24—a twelvefold surge. Although the stock has retracted in early 2025, currently down around 55% from its 52-week peak of $25, several factors could propel it back to its former highs, indicating a possible doubling from today's levels.
SoundHound's financial path illustrates clear acceleration. The company has shown significant revenue growth in recent years, with a three-year average growth rate of 69%. Even more impressively, Soundhound's revenues have doubled in the past 12 months, increasing from $51 million to $102 million. This accelerated growth is highlighted by its latest quarterly revenues, which jumped by 151.2% year-over-year to $29 million, up from $12 million.
Looking forward, management anticipates 2025 revenue between $157 million and $177 million, representing nearly 100% year-over-year growth. This updated guidance reflects robust confidence in the demand for voice AI solutions across various sectors. SoundHound's consistent capability to surpass and adjust guidance showcases its operational execution during this pivotal growth period. Additionally, if you are looking for upside with less volatility than investing in solitary stocks, the Trefis High-Quality portfolio offers an alternative—having outperformed the S&P 500 and produced returns exceeding 91% since its inception. Also, take a look at – UnitedHealth: Buy Or Sell UNH Stock At $325?
Key Growth Drivers
SoundHound's prospective growth relies on its strategic positioning and recent advancements in significant markets.
The automotive industry represents SoundHound's largest opportunity. The company has established important partnerships with major manufacturers, which include Mercedes-Benz, Hyundai, Kia, and various Stellantis brands like DS Automobiles, Peugeot, Opel, and Vauxhall.
In 2025, SoundHound considerably broadened its automotive footprint with a wider deployment of its Chat AI to other Stellantis brands, including Alfa Romeo and Citroën, in various European markets. In February 2025, SoundHound launched 'Brand Personalities,' enabling car manufacturers to personalize their voice assistants' personas. A significant partnership with Tencent Intelligent Mobility was revealed in April 2025, incorporating SoundHound's AI into Tencent's cloud solutions for global automotive brands. This expansion coincides with the rapidly growing automotive voice AI market, as manufacturers aim to enhance user experiences.
Furthermore, research from June 2025 indicated a potential annual opportunity of $35 billion for automakers through in-car voice commerce, which allows features such as ordering food and other services directly from the vehicle. As the automotive voice AI sector grows quickly and manufacturers seek to stand out through improved user experiences, SoundHound's proven integration capabilities position it to seize a considerable market share.
SoundHound's partnership with NVIDIA emphasizes its dedication to state-of-the-art development. This collaboration concentrates on edge solutions that facilitate improved Voice Generative AI experiences directly within vehicles, potentially lowering latency and enhancing user satisfaction. These technological partnerships validate SoundHound's strategy and provide access to advanced computing resources essential for next-generation voice AI applications.
SoundHound's acquisition of Amelia in August 2024 greatly augmented its enterprise presence. Amelia contributes established customer service contracts across finance, insurance, retail, and healthcare sectors, supplying immediate revenue diversification and access to numerous enterprise brands. The integration has already produced results: Amelia AI agents have handled over 100,000 customer calls for Apivia Courtage, resulting in nearly a 20% reduction in inbound inquiries. This illustrates the technology's real-world effectiveness and revenue potential.
Path to Doubling: The Upside Scenario
For SOUN shares to double from current levels, the company would need to achieve:
Currently priced at $11, SOUN has a price-to-sales (P/S) ratio of 40x based on its trailing twelve-month revenue. If SoundHound's revenues were to triple from $85 million in 2024 to an estimated $250 million in 2027, the P/S multiple would decline to 16x if the stock price remained stable, correct? But that's what Soundhound's investors hope will not occur!
Rather than the P/S ratio decreasing to 16x, a more modest contraction, perhaps to around 30x, seems more likely if revenues grow significantly. While a 30x revenue multiple may appear steep, certain leading AI sectors, especially those viewed as 'transformative,' can command considerably higher valuations. At 30 times price-to-sales, SOUN's stock price could reach about $20, representing nearly a 2x increase from current levels. The reasoning is straightforward: as revenues expand drastically, even with some multiple compression, the absolute stock price should rise significantly.
Risks to Consider
While the potential for upside is enticing, SoundHound's ability to achieve 2x growth encounters several key risks:
The Verdict
While short-term volatility might endure, SoundHound's strategic positioning in high-growth voice AI sectors, combined with accelerating revenue momentum and expanding partnerships, offers a persuasive case for significant upside potential over the next 2–3 years. However, investors should approach with a clear awareness of the risks. Elevated valuations, competitive challenges, and the stock's track record of heightened volatility during market downturns are genuine concerns that could affect returns. Now, we implement a risk assessment framework while constructing the Trefis High Quality (HQ) Portfolio which, consisting of 30 stocks, has a history of comfortably outperforming the S&P 500 over the past four years. Why is that? As a collective, HQ Portfolio stocks have yielded better returns with reduced risk compared to the benchmark index; it's been less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
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