SoundHound AI (NASDAQ:SOUN) Stock Falls 2% – Should You Sell?

SoundHound AI, Inc. (NASDAQ:SOUN)’s stock price was down 2% during mid-day trading on Thursday. The company traded as low as $5.45 and last traded at $5.52. Approximately 16,843,196 shares traded hands during trading, a decline of 38% from the average session volume of 27,332,260 shares. The stock had previously closed at $5.63.

Key Stories Impacting SoundHound AI

Here are the key news stories impacting SoundHound AI this week:

• Positive Sentiment: Enterprise AI and OASYS offer a potential growth catalyst. SoundHound’s enterprise business has become its largest segment, while its OASYS platform for building AI agents could help the company expand beyond its traditional voice-assistant image. However, the key question is whether OASYS has translated into meaningful sales. What Can Make SoundHound AI Stock A Buy?
• Positive Sentiment: Banking and financial-services expansion could broaden demand. SoundHound plans to showcase AI agents at Money20/20 USA 2026, highlighting an effort to win enterprise customers in financial services. SoundHound AI to Showcase AI Agents for Banking and Financial Services
• Neutral Sentiment: Competitive positioning remains a longer-term opportunity. SoundHound’s voice-AI technology is being presented as a possible challenge to Apple’s dominance, but the report does not identify a specific contract or revenue milestone that would immediately change investor expectations. Why SoundHound’s Voice AI Challenge Could Shake Apple’s Dominance
• Neutral Sentiment: Analysts and investors are comparing SoundHound with other AI opportunities. A comparison with Nebius emphasizes SoundHound’s conversational-AI focus and its LivePerson acquisition, but suggests investors must weigh that opportunity against Nebius’s faster-scaling AI infrastructure business. Nebius Group vs. SoundHound AI
• Negative Sentiment: Technical weakness and bearish sentiment are weighing on the shares. SoundHound broke key support and reached its lowest level since November 2024, with the stock down roughly 70% over 12 months. One report described surging short interest, although a separate data item listed zero shares short, indicating conflicting short-interest information. SoundHound Stock Breaks Key Support
• Negative Sentiment: Cash-burn and profitability concerns remain major risks. Commentary questioning whether rapid spending is creating durable competitive advantages adds to investor concerns, particularly while SoundHound continues to report negative earnings and margins. Cash-Burning Stock Commentary

Analysts Set New Price Targets

Several research firms have issued reports on SOUN. Weiss Ratings restated a “sell (e+)” rating on shares of SoundHound AI in a research note on Friday, September 11th. DA Davidson cut their target price on shares of SoundHound AI from $12.00 to $10.00 and set a “buy” rating for the company in a research report on Thursday, August 6th. Wall Street Zen cut SoundHound AI from a “sell” rating to a “strong sell” rating in a report on Saturday, September 26th. Finally, Piper Sandler reduced their price objective on SoundHound AI from $7.00 to $6.00 and set a “neutral” rating for the company in a research report on Tuesday, September 22nd. One equities research analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating, two have assigned a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and an average price target of $12.75.

SoundHound AI Price Performance

The company’s 50-day simple moving average is $6.55 and its two-hundred day simple moving average is $7.02. The firm has a market capitalization of $2.39 billion, a P/E ratio of -14.18 and a beta of 2.73.

SoundHound AI (NASDAQ:SOUN) last issued its quarterly earnings data on Wednesday, August 5th. The company reported ($0.02) earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of ($0.13) by $0.11. SoundHound AI had a negative net margin of 67.45% and a negative return on equity of 30.22%. The firm had revenue of $61.90 million during the quarter, compared to the consensus estimate of $52.38 million. During the same quarter in the previous year, the firm posted ($0.19) EPS. The company’s revenue for the quarter was up 45.0% compared to the same quarter last year. Analysts predict that SoundHound AI, Inc. will post -0.32 earnings per share for the current year.

Insider Buying and Selling

In other news, CEO Keyvan Mohajer sold 137,290 shares of SoundHound AI stock in a transaction dated Tuesday, September 15th. The stock was sold at an average price of $6.33, for a total transaction of $869,045.70. Following the transaction, the chief executive officer directly owned 3,684,947 shares of the company’s stock, valued at $23,325,714.51. The trade was a 3.59% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider James Hom sold 38,730 shares of the business’s stock in a transaction that occurred on Tuesday, September 15th. The shares were sold at an average price of $6.33, for a total value of $245,160.90. Following the transaction, the insider owned 1,105,555 shares of the company’s stock, valued at approximately $6,998,163.15. This trade represents a 3.38% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last ninety days, insiders sold 288,758 shares of company stock worth $1,828,598. Company insiders own 8.84% of the company’s stock.

Institutional Investors Weigh In On SoundHound AI

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. NewEdge Advisors LLC increased its stake in shares of SoundHound AI by 38.1% in the second quarter. NewEdge Advisors LLC now owns 132,072 shares of the company’s stock worth $855,000 after purchasing an additional 36,415 shares in the last quarter. IFP Advisors Inc lifted its stake in shares of SoundHound AI by 10.7% during the 2nd quarter. IFP Advisors Inc now owns 32,748 shares of the company’s stock valued at $212,000 after buying an additional 3,163 shares in the last quarter. Allworth Financial LP lifted its stake in shares of SoundHound AI by 12.7% during the 2nd quarter. Allworth Financial LP now owns 22,539 shares of the company’s stock valued at $146,000 after buying an additional 2,537 shares in the last quarter. Waverly Advisors LLC boosted its holdings in SoundHound AI by 6.9% in the 2nd quarter. Waverly Advisors LLC now owns 64,132 shares of the company’s stock worth $415,000 after buying an additional 4,138 shares during the period. Finally, Nykredit A S bought a new position in SoundHound AI in the 2nd quarter worth $165,000. Institutional investors own 19.28% of the company’s stock.

SoundHound AI Company Profile

SoundHound AI, Inc develops voice artificial intelligence technologies that enable people to interact with products and services using natural language. Its platform is designed to understand conversational speech, answer questions, and support voice-enabled experiences across automotive, restaurant, consumer electronics and other industries.

The company’s offerings include the Houndify voice AI platform, which businesses can use to build customized voice assistants, and SoundHound Chat AI, a conversational assistant designed to provide responses and complete tasks through voice interaction.