SoundHound AI (NASDAQ: SOUN) experienced an extraordinary surge in 2024, climbing from $2 to $24—a twelvefold increase. While the stock has pulled back in early 2025, now down approximately 55% from its 52-week high of $25, several catalysts could drive it back to its previous highs, representing a potential doubling from current levels.
SoundHound’s financial trajectory shows clear acceleration. The company has demonstrated substantial revenue growth in recent years, with a three-year average growth rate of 69%. More impressively, Soundhound’s revenues doubled over the last 12 months, increasing from $51 million to $102 million. This accelerated growth is further underscored by its most recent quarterly revenues, which surged by 151.2% year-over-year to $29 million, up from $12 million.
Looking ahead, management projects 2025 revenue between $157 million and $177 million, representing approximately 100% year-over-year growth. This increased guidance signals strong confidence in the demand for voice AI solutions across multiple sectors. SoundHound’s consistent ability to exceed and raise guidance highlights its operational execution during a critical growth phase. Separately, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception. Also, check out – UnitedHealth: Buy Or Sell UNH Stock At $325?
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Key Growth Drivers
SoundHound’s future growth hinges on its strategic positioning and recent advancements in key markets.
Expanding Automotive Market Penetration
The automotive sector represents SoundHound’s most significant opportunity. The company has forged crucial partnerships with major manufacturers, including Mercedes-Benz, Hyundai, Kia, and various Stellantis brands such as DS Automobiles, Peugeot, Opel, and Vauxhall.
In 2025, SoundHound significantly expanded its automotive presence with a broader rollout of its Chat AI to additional Stellantis brands, including Alfa Romeo and Citroën, across various European markets. In February 2025, SoundHound introduced “Brand Personalities,” allowing car manufacturers to customize their voice assistants’ personas. A key collaboration with Tencent Intelligent Mobility was announced in April 2025, integrating SoundHound’s AI into Tencent’s cloud solutions for global auto brands. This expansion aligns with the accelerating automotive voice AI market, as manufacturers seek to enhance user experiences.
Furthermore, June 2025 research highlighted a potential $35 billion annual opportunity for automakers through in-car voice commerce, enabling features like ordering food and other services directly from the vehicle. As the automotive voice AI market rapidly expands and manufacturers strive for differentiation through enhanced user experiences, SoundHound’s proven integration capabilities position it to capture a substantial share.
Strategic Technology Partnerships
SoundHound’s collaboration with NVIDIA underscores its commitment to cutting-edge development. This partnership focuses on edge solutions that enable enhanced Voice Generative AI experiences directly in vehicles, potentially reducing latency and improving user experiences. These technology partnerships validate SoundHound’s approach and provide access to advanced computing resources essential for next-generation voice AI applications.
Expanding Enterprise Footprint Through Acquisition
SoundHound’s August 2024 acquisition of Amelia significantly expanded its enterprise presence. Amelia brings established customer service contracts across finance, insurance, retail, and healthcare sectors, providing immediate revenue diversification and access to hundreds of enterprise brands. The integration has already yielded results: Amelia AI Agents have handled over 100,000 customer calls for Apivia Courtage, reducing inbound queries by nearly 20%. This demonstrates the technology’s real-world impact and revenue potential.
Path to Doubling: The Upside Scenario
For SOUN stock to double from current levels, the company would need to demonstrate:
- Sustained Revenue Growth: Maintaining 25%+ growth rates in the coming years after doubling revenues this year.
- Margin Expansion: Converting revenue growth into improving profitability metrics.
- Market Share Gains: Capturing significant portions of both the automotive and restaurant voice AI markets.
- Successful Integration: Realizing synergies from the Amelia acquisition.
Let’s examine the potential upside.
Currently trading at $11, SOUN has a price-to-sales (P/S) ratio of 40x based on its trailing twelve-month revenue. If SoundHound’s revenues were to grow threefold from $85 million in 2024 to an estimated $250 million in 2027, the P/S multiple would shrink to 16x if the stock price remained constant, right? But that’s what Soundhound’s investors are betting will not happen!
Instead of the P/S ratio compressing to 16x, a more modest compression, perhaps to around 30x, appears more likely if revenues expand significantly. While a 30x revenue multiple may seem high, certain leading AI niches, especially those perceived as “transformative,” can command significantly higher valuations. At 30 times price-to-sales, SOUN’s stock price could reach around $20, representing nearly a 2x gain from current levels. The logic is straightforward: as revenues expand dramatically, even with some multiple compression, the absolute stock price should rise significantly.
Risks to Consider
While the upside potential is compelling, SoundHound’s ability to achieve a 2x growth faces several key risks:
- Financial & Valuation: The company continues to incur significant losses and burn cash due to high operating expenses. Its current high valuation demands consistent, strong revenue beats; any miss could lead to significant stock price declines.
- Market & Competition: SoundHound operates in a highly competitive voice AI market, facing macroeconomic headwinds and competition from larger tech companies, which could lead to pricing pressures and impact margins.
- Operational & Market Volatility: The stock is highly volatile, making it unsuitable for risk-averse investors. Historically, SOUN stock has fared much worse than the benchmark S&P 500 index during economic downturns. For instance, it fell a whopping 94% from a high of $15 on May 5, 2022, to $0.97 on December 22, 2022, compared to a peak-to-trough decline of 25% for the S&P 500 during the same period.
- Execution & Technological Disruption: Meeting ambitious revenue guidance is crucial for justifying its valuation. The rapidly evolving voice AI market also poses risks of technological or regulatory disruptions that could undermine SoundHound’s competitive edge.
The Verdict
While near-term volatility may persist, SoundHound’s strategic positioning in high-growth voice AI markets, combined with accelerating revenue momentum and expanding partnerships, presents a compelling case for significant upside potential over the next 2–3 years. However, investors should proceed with a clear understanding of the risks. Lofty valuations, competitive pressures, and the stock’s history of amplified volatility during market downturns are real concerns that could impact returns. Now, we apply a risk assessment framework while constructing the Trefis High Quality (HQ) Portfolio which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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