SoundHound AI (SOUN) stock is living up to its name, and then some, with its stock soaring over 50% this week.
The eponymous AI stock’s rally is on a stupendous run, following a monster Q2 beat, raised guidance, with new deals spanning Chinese automakers to Red Lobster drive-thrus.
It’s the kind of run that has the bulls blinking at the speed.
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However, there’s no single headline that explains it all.
Instead, the rally is a culmination of multiple threads pieced together. For a company that was once dismissed as niche, the sudden uptrend is forcing investors to revisit their narratives.
Why SoundHound’s voice-first AI approach is resonating with investors
SoundHound AI isn’t trying to ape Alexa or Siri, but it’s carving a unique niche where voice assistants actually do something useful.
Its AI-powered technology powers everything from drive-thru order systems, customer-service bots, and in-car assistants for brands like Hyundai and Kia.
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The goal is straightforward in delivering swift, natural-sounding responses that efficiently cut wait times, reduce labor costs, and keep the action going.
That specialization makes SoundHound a “voice-first” alternative to the Big Tech assistants, and “even for small operations,” the platform delivers stellar economics.
Its relationship with Nvidia adds to its technical horsepower.
It’s important to note that SoundHound was once an Nvidia-backed startup, where it held 1.73 million shares of SOUN stock, worth around $3.7 million at the end of December 2023.
By the conclusion of last year, that same block would’ve been valued at close to $33.7 million. Nvidia cashed out in Q4 2024, though, a move confirmed in its Feb. 14, 2025, 13F filing.
Nevertheless, SoundHound is still a key tech partner with Nvidia, integrating Nvidia’s AI Enterprise stack, including NeMo and NIM microservices, into its next-gen in-vehicle assistant.
Running on Nvidia DRIVE AGX, the system generates seamless responses with low latency, backed by robust retrieval-augmented generation for greater accuracy.
That’s a key edge for automotive use cases, where a split-second delay could impact the user.
SoundHound AI posts record Q2, raises guidance on broad-based growth
SoundHound AI’s Q2 results were its strongest yet.
Revenue surged 217% year over year to $42.7 million, blowing past expectations by about $10 million.
On the bottom-line front, Non-GAAP EPS improved to a $0.03 loss, roughly $0.06 better than the Street’s forecast.
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Management also raised full-year sales guidance to $160 million-$178 million, indicating an impressive run-rate heading into the second half of 2025.
Moreover, growth wasn’t limited to a solitary vertical.
Its Automotive division surged after a major win with a large Chinese OEM, which plans to roll out SoundHound’s in-vehicle assistant across multiple models worldwide.
Moreover, its Restaurants segment posted “breakthrough” momentum, with new logos like Red Lobster and Applebee’s | IHOP, along with key renewals such as MOD Pizza.
On the enterprise end, customer-service deployments grew at an encouraging pace in areas like financial services and healthcare.
Also, it launched its powerful agentic AI platform “Amelia 7,” powered by its Polaris speech foundation model, a move likely to increase cross-selling opportunities and deal sizes.
Margins showed a conflicting picture with GAAP gross margins landing at 39% due to acquisition mix, while its liquidity remains healthy with $230 million in its cash till and zero debt at quarter-end.
That gives SoundHound the flexibility to fund growth and scale new rollouts.
Analysts shower SoundHound AI with praise after blowout Q2
SoundHound AI’s latest quarter had Wall Street buzzing and, in many cases, raising their bets.
Over the past week, the stock’s up a superb 50%, skyrocketing 37.4% in the past month alone. Similarly, over nine months, the stock’s up almost 49%.
That said, Wedbush maintained its outperform rating and bumped its price target to $16 from $15, on the back of a greater confidence in the company’s growth story heading into the back end of the year and beyond.
Veteran tech analyst Daniel Ives showered praise on SoundHound AI after a blowout beat-and-raise quarter, with wins across the board. Also, the guidance bump was deemed conservative by Wedbush, pointing to strong demand across all verticals.
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Other firms joined in. Piper Sandler reiterated its neutral rating but lauded the better-than-expected profitability and gross margins. Similarly, DA Davidson hiked its target to $15, while Ladenburg Thalmann upgraded to buy and matched Wedbush’s $16 call.
As Dan Ives put it, SoundHound AI remains “an underappreciated pure-play AI company taking share across all verticals.”
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