Should you invest in Soundhound?

Soundhound specialises in creating conversational AI applications for businesses and has a market cap of around $2 billion. Their main product lineup includes voice-based systems that can be integrated in car systems or restaurants without the need for human assistance. Clients of the company includes popular restaurants such as Chipotle and Papa Johns. The increasing operational capacity of these companies, coupled with easing monetary policies sets the company up for further growth. Soundhound is also closely working with Nvidia, allowing its AI system to work without connection to the internet.

Soundhound’s AI software is proven to be effective as it has been deployed in over 10 000 various locations and is in the process of being implemented in another 100 000. SoundHound is also expanding its product range into catergories such as Smart answering to increase their streams of revenue.

Revenue is forecasted to increase by almost 80% to $80 million by the end of the year. This bullish outlook carries on into 2025, where revenue is expected to reach $150 million. Besides from high expectations of revenue growth, Soundhound has also recently acquired Amelia, another AI company. This acquisition opens the company open to more sectors, notably healthcare, financial services and insurance.

The company reported a 90% increase in revenue in its Q3 earnings report to $25 million, up from analyst forecasts of $23 million. Year to date, the stock has increased by almost 200%, outpacing the 17.7% seen in the S&P 500. However, the stock has been volatile, following market trends in the AI sector. The RSI is at a height of 65.5, showing the bullish sentiment of investors in this company. Price estimates range from $9.75 to $13.35 at the end of 2025.

SoundHound is a great long term hold. The company has shown an average 70% year on year increase in revenue. Over the quarter, it has doubled its cash reserves to $225 million to gear up for future investments in innovation. I believe this is a good investment over the long term, but it is good to be wary of market volatility.