SoundHound AI Stock Plunges 7.7% Despite Record Q3 Revenue Surge, Outlook Hike

The share price fell to its lowest level since September 2025 today, with an intraday decline of 7.70%.

SoundHound AI (NASDAQ:SOUN) reported record third-quarter revenue of $42.05 million, a 68% year-over-year increase, surpassing analyst estimates. The firm raised its 2025 full-year revenue outlook to $165–$180 million, citing robust enterprise AI demand and a strategic eight-figure robotics contract in China. CEO Keyvan Mohajer highlighted the company’s conversational AI technology as 35–40% superior to major competitors in accuracy and latency, reinforcing its competitive edge. Despite these fundamentals, shares plummeted, reflecting mixed investor sentiment amid broader market volatility.

SoundHound’s $269 million in cash reserves and upgraded analyst price target to $15 from $12 suggest strong long-term potential. However, the stock’s sharp selloff underscores near-term risks, including sector-wide concerns about AI overvaluation and profit-taking after recent gains. The company’s focus on enterprise and robotics applications aligns with growing automation trends, but execution risks and macroeconomic pressures remain. With a revised revenue outlook and technological leadership, SoundHound’s ability to sustain growth will likely dictate its path forward in a rapidly evolving AI landscape.