SoundHound AI's Growth to Skyrocket in H2 2025: Analyst Predicts 100% Revenue Growth Pace

SoundHound AI, a leader in audio recognition technology, has experienced a decline in its stock price this year, but growth figures suggest a turnaround could be on the way. The company's revenue rose 151% YoY in Q1 to $29.1 million, and management maintains a full-year guidance of 97% YoY growth. With a strong backlog of $1.2 billion, SoundHound AI could continue to deliver strong growth in the second half of 2025 and beyond.

SoundHound AI (NASDAQ: SOUN), a leader in audio recognition technology, has seen its stock price decline this year, despite robust revenue growth. The company's stock has fallen 45.9% from January through June 2025, despite a 5.5% gain for the S&P 500 index over the same period [2]. This decline has been attributed to several factors, including high valuation, decreasing gross margins, and competition from tech giants.

Revenue Growth and Sales Backlog

SoundHound AI's revenue grew 151% year-over-year (YoY) in Q1 2025 to $29.1 million, according to its latest financial results [2]. This growth was driven by partnerships with major players like Applebee's and a quick-service restaurant (QSR) with over 2,000 outlets. The company's backlog of booked sales also surged 80% YoY to $682 million, reflecting long-term contracts with clients like Stellantis and EV manufacturers. The $1.2 billion sales backlog underscores the company's strong market demand and growth prospects.

Expansion into Healthcare

SoundHound AI's expansion into the healthcare sector is another key driver of its growth. The company's voice AI solutions are being integrated into healthcare applications, enhancing user experiences through seamless voice interactions. This move positions SoundHound AI to tap into a $160 billion addressable market for voice AI transactions [1]. The company's strategic collaboration with global giants like Tencent and its showcase at Nvidia's GPU Technology Conference 2025 have bolstered its international footprint, further solidifying its global growth strategy.

Risks and Considerations

While SoundHound AI's financial performance has been impressive, there are several risks and considerations that investors should be aware of. Julia Ostian, an investor, has cited high valuation (40x trailing sales) and decreasing gross margins as potential risks. The company's gross margin dipped to 60% in Q1 2025, largely due to integration costs from acquisitions. However, non-GAAP metrics show narrowing losses, suggesting operational discipline [1]. Additionally, SoundHound AI faces competition from tech giants like Apple and Google, which dominate voice AI in automotive and consumer applications. The company's edge lies in its specialization in voice-first solutions for specific industries, not generic AI. Despite these challenges, SoundHound AI's niche expertise and agility could position it to outperform in its target markets.

Analyst Price Targets

According to Wall Street analysts, SoundHound AI's stock is expected to reach an average of $12 by the end of 2024, with a high target of $26 and a low of $6 [3]. As of mid-July 2025, SoundHound AI trades around $12. Analysts expect the company's revenue to rise dramatically over the next few years, with forecasts calling for $160 million in revenue by the end of 2025 [3].

Conclusion

SoundHound AI's stock price decline this year has been driven by several factors, including high valuation, decreasing gross margins, and competition from tech giants. However, the company's strong revenue growth, expansion into the healthcare sector, and robust sales backlog suggest that a turnaround could be on the way. Investors should exercise caution given the high valuation and competition, but the company's niche expertise and agility position it to outperform in its target markets.

References
[1] https://www.ainvest.com/news/investor-warns-soundhound-ai-stock-overvalued-promising-growth-2507/
[2] https://finance.yahoo.com/news/why-soundhound-ai-stock-plummeted-190700738.html
[3] https://www.tikr.com/blog/soundhound-ai-stock-price-prediction