SoundHound AI Shares Rise 2.7% on Fed Hints, Surging $630M Volume Propels It to 163rd in Market Activity Amid Profitability Doubts and Institutional Selling

On August 22, 2025, SoundHound AI (SOUN) rose 2.70% to $12.65, with a trading volume of $630 million—up 50.93% from the prior day—ranking it 163rd in market activity. The move followed Federal Reserve Chair Jerome Powell’s dovish remarks at the Jackson Hole symposium, which signaled potential rate cuts amid moderating inflation and low unemployment, easing concerns over prolonged high rates. Market participants interpreted the comments as a catalyst for risk-on sentiment, particularly in AI-driven sectors.

Recent developments highlight mixed investor sentiment. While the company reported a 217% year-over-year revenue surge in Q2, reflecting strong adoption of its voice AI technology in automotive and financial services, profitability remains elusive. The stock’s sharp intraday volatility—characterized by a 3% drop earlier in the week—underscores ongoing skepticism about long-term valuation sustainability. Analysts have issued four “Buy” ratings in the past six months, with price targets ranging from $10 to $18, but institutional investors have reduced holdings, including major firms like Morgan Stanley and UBS, which cut positions by 59.3% and 33.8%, respectively.

Insider trading activity further complicates the outlook. Key executives, including CEO Keyvan Mohajer and CFO Nitesh Sharan, sold shares totaling millions of dollars in the past six months, raising questions about confidence in near-term execution. Meanwhile, members of Congress purchased $15,000 in SOUN shares in July, contrasting with broader institutional skepticism. The stock, down 37.3% year-to-date, trades at 46 times sales—a premium to typical software multiples—despite a $74.7 million net loss in Q2.

A backtest of a volume-based strategy—buying the top 500 stocks by daily trading volume and holding for one day—yielded $2,340 in profit from 2022 to the present, with a cumulative return of 23.4%. While positive, the result suggests limited alpha generation from short-term liquidity-driven approaches in the AI sector.