SoundHound AI Surges 17% Amid Strategic Upgrade and Record Revenue Despite 35th-Ranked Liquidity

On August 11, 2025, SoundHound AI (SOUN) surged 17.34% to $15.90 per share, marking a significant rebound after a 33.21% drop in trading volume to $1.88 billion, which ranked 35th in daily liquidity. The rally followed a strategic upgrade from Ladenburg Thalmann, which raised its rating to Buy from Neutral and lifted the one-year price target to $16 from $9. The firm cited strong contract momentum and long-term growth potential in the conversational AI sector as key drivers.

SoundHound’s second-quarter results fueled the optimism, with revenue jumping 217% year-over-year to $42.7 million, surpassing estimates. The company highlighted a major automotive deal in China and expansion into financial services and quick-serve restaurants. Additionally, the launch of Vision AI—a real-time visual understanding platform—positioned the firm to extend its leadership in voice-based technology, creating a unified ecosystem across automotive, enterprise, and restaurant sectors.

Despite the gains, valuation concerns persist. The stock trades at nearly 38 times this year’s expected sales, with thin margins for a software services company. While Ladenburg noted that low-margin contracts from the Amelia acquisition are expected to phase out by mid-2027, the firm acknowledged the high valuation multiple. SoundHound’s adjusted EBITDA loss narrowed to $14.3 million in Q2, with analysts forecasting revenue of over $270 million and double-digit margins by 2027.

The strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day yielded a 166.71% return from 2022 to the present, outperforming the benchmark by 137.53%. This underscores the role of liquidity concentration in short-term performance, particularly in volatile markets. High-volume stocks like SoundHound often respond more actively to market movements, offering opportunities for momentum-driven strategies.