SoundHound AI Stock Sees 45% Gain, Analysts Upgrade to Buy

SoundHound AI (SOUN) has reported record Q2 revenue of $42.7 million, up 217% YoY, and raised its full-year revenue forecast to $160-$178 million. Analysts have responded by raising price targets and upgrading the stock to Buy, but the near-term upside appears limited following the recent surge in SOUN's stock price. The average stock price target is $15.29, suggesting a potential downside of 3.11% from the current level.

SoundHound AI (SOUN) has reported record Q2 revenue of $42.7 million, up 217% year-over-year (YoY), and raised its full-year revenue forecast to $160-$178 million. The company's strong performance has prompted analysts to upgrade the stock to a "Buy" rating and raise price targets, although the near-term upside appears limited following the recent surge in SOUN's stock price.

The company's Q2 revenue of $42.7 million exceeded analyst expectations by nearly $9.8 million, driven by robust adoption in key verticals and incremental contributions from recent acquisitions. Gross margins contracted sharply to 39.0% from 63.0% last year, primarily due to the addition of lower-margin businesses. Despite this, the company reported a non-GAAP net loss of $11.9 million, an improvement from a $14.9 million loss a year earlier.

SoundHound AI's CEO, Keyvan Mohajer, described the quarter as "our all-time strongest," highlighting growth across automotive, enterprise AI, and restaurant automation segments. The platform now processes over 1 billion monthly queries, and the company's restaurant solutions now serve over 14,000 locations, with notable additions including Red Lobster and IHOP.

The company raised its full-year 2025 revenue forecast to $160-$178 million, up from a prior estimate of $159.54 million. The company aims to achieve adjusted EBITDA profitability by year-end 2025. Key drivers of this growth include new automotive wins in China, restaurant partnerships, and strong adoption of its Polaris AI model.

Investors should closely monitor SoundHound AI's progress in recovering gross margins, the pace of integration within acquired businesses, and continued expansion into new geographies and verticals. The company's focus on innovation in language models and agentic AI remains a key area to watch.

Analysts have responded to the strong earnings report by upgrading the stock to a "Buy" rating. Wedbush analyst Daniel Ives has raised the firm's price target to $16 from $15 while maintaining an outperform rating, calling it an "under-appreciated pure-play AI company." The average stock price target is $15.29, suggesting a potential downside of 3.11% from the current level.

[1] https://www.ainvest.com/news/soundhound-ai-q2-revenue-surges-217-raises-2025-forecast-gains-analyst-buy-rating-2508/
[2] https://finance.yahoo.com/news/once-battered-ai-stock-surges-014700701.html