SoundHound Stock Surges After Vanguard Buys More Shares: Should You Invest?

Vanguard has acquired over 5.29 million shares of SoundHound AI in the first half of 2025, bringing its total ownership to 37.32 million shares. The stock has surged 100% since its year-to-date low in April, but is still trading at a high price-to-sales ratio of 53x. Analyst Michael Latimore has warned of potential downside to $8 per share. The consensus rating on SoundHound shares remains "Moderate Buy" with an average price target of $11.50.

Vanguard has made a substantial investment in SoundHound AI, Inc. (SOUN), acquiring over 5.29 million shares in the first half of 2025, according to a regulatory filing dated July 7 [1]. This acquisition brings Vanguard's total ownership to 37.32 million shares, signaling strong conviction in the company's long-term potential. The stock has surged 100% since its year-to-date low in April, reaching a new high.

The aggressive accumulation of SOUN shares by Vanguard has sparked investor interest, potentially attracting additional institutional investment and bolstering overall liquidity in the stock. SoundHound AI's voice-enabled AI technology has gained traction across several industries, including automotive, customer care, and enterprise software, driving a significant revenue increase of 151% year-over-year in its fiscal Q1 [1].

However, despite the positive momentum, caution is advised. SOUN stock is currently trading at a high price-to-sales ratio of 53x, more than double the multiple of Nvidia (NVDA). This valuation concern has led Michael Latimore, a senior Northland Securities analyst, to reiterate his "Hold" rating on SoundHound AI, warning of potential downside to $8 per share [1].

Analysts remain divided on SOUN. While the consensus rating is "Moderate Buy," the average price target of $11.50 indicates potential downside of nearly 14% from the current price [1]. Other notable analyst ratings include "Buy" from HC Wainwright and DA Davidson, and "Overweight" from Piper Sandler [3]. Meanwhile, insider selling activity has been observed, with COO Michael Zagorsek and CFO Nitesh Sharan selling shares in recent transactions [3].

The stock's recent performance and Vanguard's significant investment have undoubtedly caught the attention of investors. However, the high valuation and analyst warnings suggest a cautious approach. Investors should closely monitor the company's financials and the broader market conditions before making investment decisions.

References:
[1] https://finance.yahoo.com/news/vanguard-just-bought-more-soundhound-185220002.html
[2] https://www.barchart.com/story/news/33279109/vanguard-just-bought-more-soundhound-stock-should-you
[3] https://www.marketbeat.com/instant-alerts/filing-vontobel-holding-ltd-acquires-new-position-in-soundhound-ai-inc-nasdaqsoun-2025-07-07/