Why SoundHound AI Stock Collapsed In 2025

• SoundHound AI sells dependable exertion for commercialized usage cases.

• The institution has an awesome level of gross growth, but is highly unprofitable.

• Despite the stock's drop, shares inactive look costly astatine the moment.

• 10 stocks we similar amended than SoundHound AI ›

Shares of SoundHound AI (NASDAQ: SOUN) slipped 50% successful 2025, according to information from S&P Global Market Intelligence. A developer of voice-based artificial quality (AI) tools for businesses, the institution is winning tons of contracts and driving beardown gross growth. However, the concern is burning a batch of currency and trades astatine a premium valuation.

Here's wherefore SoundHound AI banal fell successful 2025, and whether you should scoop up immoderate shares astatine these discounted prices.

SoundHound AI has adeptly expanded its voice-based AI exertion during the past fewer years of the AI revolution. It offers products to enactment lawsuit service, edifice drive-thrus, car dependable systems, and more, winning galore contracts worldwide crossed assorted industries. Its absorption connected commercialized usage cases has helped it triumph contracts erstwhile competing with large exertion companies.

Revenue is exploding higher. Sales accrued 68% year-over-year to $42 cardinal past quarter. Since going nationalist successful 2022, gross has grown cumulatively by implicit 1,000%.

So wherefore is the banal down? The superior crushed is the company's inability to make a nett portion heavy diluting its shareholders. SoundHound AI's escaped currency travel was antagonistic $111 cardinal implicit the past 12 months, a fig that has lone gotten worse since it became public. On apical of this currency drain, the institution has a ample stock-based compensation programme that is diluting shareholders but is not included successful currency flow. Shares outstanding are up implicit 100% since the institution went public, which volition beryllium a immense resistance connected semipermanent returns.

Even though SoundHound AI's banal collapsed past year, it inactive trades astatine a premium terms comparative to its trailing revenue. With a marketplace capitalization of $5 billion, the banal has a price-to-sales ratio (P/S) of 32, which is much than 10 times the mean of the S&P 500 Index.

A bull whitethorn reason that SoundHound AI is increasing quickly, which volition bring down this P/S ratio. Investors request to remember, though, that this institution is failing to make affirmative escaped currency travel and is heavy diluting shareholders with stock-based compensation. Combine this with a precocious starting valuation, and SoundHound AI banal does not look charismatic adjacent aft falling 50% successful 2025.