Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Let's take a look at what these Wall Street heavyweights have to say about SoundHound AI, Inc. (SOUN - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
SoundHound AI currently has an average brokerage recommendation (ABR) of 1.75, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by eight brokerage firms. An ABR of 1.75 approximates between Strong Buy and Buy.
Of the eight recommendations that derive the current ABR, five are Strong Buy, representing 62.5% of all recommendations.
Brokerage Recommendation Trends for SOUN
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The ABR suggests buying SoundHound AI, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is SOUN a Good Investment?In terms of earnings estimate revisions for SoundHound AI, the Zacks Consensus Estimate for the current year has increased 21.8% over the past month to -$0.16.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for SoundHound AI. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for SoundHound AI may serve as a useful guide for investors.
Key Takeaways SoundHound's OASYS is moving enterprise AI from demos to signed contracts within months.One OASYS commitment reached eight figures in under 90 days, while pilots convert at a record pace.LivePerson expands SoundHound's reach to 25 Fortune 100 companies across voice and digital channels. SoundHound AI (SOUN - Free Report) is showing early signs that OASYS can shorten the path from enterprise AI experimentation to commercial deployment. Management said that prospects are moving from demos to signed contracts within months, while pilots are converting into large implementations at a record pace. One notable commitment reached eight figures less than 90 days after the initial demo, highlighting OASYS’ potential to accelerate enterprise sales cycles.
A key advantage is OASYS’ self-building and self-optimizing architecture. The platform allows enterprises to create AI agents quickly and deploy them across multiple channels rather than tying workflows to a single interface. Management noted that one healthcare customer was able to build agents within minutes. This flexibility could make OASYS attractive to large organizations seeking consistent automation across complex customer-service environments.
Commercial traction is supporting the thesis. SoundHound’s enterprise AI business remained its largest revenue contributor in the second quarter, while OASYS helped accelerate deals across healthcare, financial services, technology and automotive. Second-quarter 2026 revenues rose 45% year over year to $61.9 million, alongside improvement in adjusted EBITDA.
The recently completed LivePerson acquisition could significantly expand OASYS’ scaling opportunity. SoundHound now reaches a customer base including 25 Fortune 100 companies, while LivePerson’s digital messaging platform will be integrated into OASYS across voice, web, mobile, SMS and social channels.
Still, execution remains key. SoundHound must integrate LivePerson effectively and translate rapid pilot conversions into recurring, profitable deployments. If OASYS maintains its current conversion momentum while expanding across the enlarged customer base, enterprise AI could become an increasingly powerful growth engine.
How SoundHound Compares With Enterprise AI RivalsFive9 (FIVN - Free Report) is a key competitor in enterprise conversational AI, combining cloud contact-center software with AI-driven automation, virtual agents and workflow tools. Five9 benefits from an established enterprise customer base and deep contact-center integrations, giving Five9 a strong platform for scaling AI deployments. However, SoundHound’s OASYS differentiates itself through self-building, self-optimizing agents and faster movement from pilot programs to production-scale implementations.
NICE (NICE - Free Report) is another major rival, offering AI-powered customer-experience automation through its CXone platform. NICE has broad enterprise reach, mature contact-center capabilities and a large installed base that can support cross-selling of AI solutions. NICE also benefits from strong workflow orchestration and analytics capabilities. Still, SoundHound is positioning OASYS around rapid deployment, omnichannel orchestration and agentic automation. While Five9 and NICE have greater enterprise scale, SoundHound’s ability to shorten deployment cycles could help it win customers seeking faster AI adoption and measurable returns.
SOUN’s Price Performance, Valuation & EstimatesSoundHound’s shares have lost 32.4% year to date (YTD), underperforming the industry, as shown below.
SOUN’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, SOUN trades at a forward price-to-sales (P/S) multiple of 11.43, slightly lower than the industry’s average.
SOUN’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Over the past 30 days, the Zacks Consensus Estimate for SoundHound’s 2026 and 2027 loss per share has narrowed to 16 cents and 13 cents, respectively, as shown below. The expected loss for 2026 remains wider than the previous year’s loss of 13 cents per share.
Image Source: Zacks Investment Research
SOUN currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
After dipping 5.3% lower in July, shares of SoundHound AI (SOUN +0.00%) stock jumped higher last month after the artificial intelligence (AI) company' reported strong Q2 2026 financial results.
According to data provided by S&P Global Market Intelligence, SoundHound AI stock rose 16.8% in August.
Image source: Getty Images.
$61.9 million in Q2 2026 revenue sounded good to SoundHound AI investors Surpassing the $52.4 million that analysts had anticipated, SoundHound AI reported second-quarter 2026 revenue of $61.9 million, a 45% year-over-year increase. At the bottom of the income statement, the company also exceeded expectations. While analysts estimated SoundHound AI would report an adjusted loss per share of $0.05, the company posted a slimmer $0.02 adjusted loss per share.
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Although SoundHound AI is still incurring a net loss, the company is making progress toward profitability. In Q2 2026, it expanded its gross profit margin to 45.1% from 39% during the same period last year.
In the press release addressing the financial results, SoundHound AI interim CFO and co-founder James Hom lauded the success of the company's recently launched OASYS, an AI system that enables customers to build and deploy conversational AI agents to accomplish several tasks, such as handling transactions, tasks, and workflows on behalf of customers and employees, stating, "We are excited by the strong interest we are already seeing with OASYS, which is a testament to the category-defining technology we continue to deliver to the market. Our investment in innovation, combined with our cost discipline, is key as we drive our business toward achieving profitable growth."
In addition to the recent quarter, investors celebrated the company's updated 2026 revenue guidance, which ranges from $230 million to $260 million. Should the company achieve the midpoint of this forecast, it will represent year-over-year sales growth of 45%.
While the market celebrated the company's financial results, some analysts took a more bearish stance on the AI stock -- a factor that contributed to shares giving back some of the gains they had made immediately after the company's Q2 results announcement. Piper Sandler analyst James Fish, for example, cut the price target on SoundHound to $7 from $8, maintaining a neutral rating. Similarly, Gil Luria, a DA Davidson analyst, reduced the firm's price target to $10 from $12.
SoundHound AI stock is hanging on the discount rack Falling 5.9% so far in September, SoundHound AI stock has given back some of the gains that it logged in August. Couple this with the fact that shares of the AI stock are trading at 13.9 times sales -- a discount to their five-year average P/S multiple of 17.2 --, and it looks like now's a good time to start a position.
SoundHound AI (SOUN +0.00%) is becoming a much bigger company. LivePerson (LPSN +0.00%) shareholders approved the sale of their company to the voice artificial intelligence (AI) specialist on Sept. 2, and the mostly stock deal closed on Friday, Sept. 4.
SoundHound's own second-quarter revenue grew 45% year over year to a record $61.9 million, and management raised the low end of its full-year outlook, which now calls for $230 million to $260 million of revenue in 2026.
Stack a large acquired business on top of that growth, and the top line could reach half a billion dollars surprisingly soon. The losses are moving much more slowly. Here's my prediction: SoundHound passes $500 million in annual revenue before it earns a sustained profit.
Image source: The Motley Fool.
Record revenue, a raised outlookSoundHound's growth record is short but steep. Revenue nearly doubled in 2025, reaching $168.9 million. The first quarter of 2026 came in at $44.2 million, up 52% year over year, and the second quarter's growth was 45%, with revenue up 40% from the first quarter alone. The growth rate is decelerating as the numbers get bigger. But the dollars keep setting records.
This year's guidance of $230 million to $260 million implies 36% to 54% growth. Notably, the range excludes LivePerson. Management plans to update its guidance after the deal closes, likely before the end of the year.
From the $245 million midpoint, the compounding works fast. Another year of 45% growth would put 2027 revenue near $355 million, and a repeat in 2028 would land the company at about $515 million. Even if growth cooled to 30%, revenue would cross $500 million in 2029.
LivePerson pulls the timeline into 2028The acquisition, a mostly stock deal with an enterprise value of about $250 million, brings a business nearly as large as SoundHound itself. LivePerson expects $195 million to $207 million of revenue this year.
That revenue is shrinking, though. Guidance calls for a 15% to 20% decline in 2026, and revenue retention among LivePerson's enterprise and mid-market customers fell to 78% last year.
SoundHound's own combined-company forecast reflects the erosion. Management projects at least $350 million to $400 million of revenue in 2027 (still below what the two would generate this year combined).
Still, from the top of that range, the combined company needs only about 25% growth in 2028 to pass $500 million -- a fraction of the rate SoundHound is delivering on its own. Management has said the combined business is expected to reach up to $500 million on its existing customers alone. I think revenue crosses in 2028, with 2029 as the slow case.
When do the profits show up?Much later, on the current trend.
SoundHound's non-GAAP (adjusted) EBITDA loss narrowed to $9.6 million in the second quarter from $14.3 million a year earlier, a 33% improvement. (Adjusted EBITDA is earnings before interest, taxes, depreciation, and amortization, excluding items like stock-based compensation.)
The loss line is narrowing, but not in a straight line. The first quarter's adjusted loss widened year over year, to $26.7 million from $22.2 million.
The bigger problem is the gap between that measure and the company's full losses. SoundHound's second-quarter net loss was $42.8 million (about 69% of revenue), an improvement from $74.7 million a year earlier. Stock-based compensation plus depreciation and amortization alone separate the two figures by more than $30 million a quarter, and quarterly mark-to-market swings on acquisition-related liabilities add noise on top.
Of course, those swings can point the other way, too. SoundHound reported $40.1 million of net income in the fourth quarter of 2025, thanks to an $85 million non-cash mark-to-market gain. But that isn't the kind of profit this prediction is about.
And LivePerson won't speed things up. It lost $72.6 million last quarter, including a $51.8 million goodwill impairment, and the merger adds fresh acquisition accounting on top.
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Ultimately, this isn't a close race. On the current pace, revenue passes $500 million in 2028. A sustained profit (money earned on operations, not a one-quarter accounting gain) looks unlikely before 2029 at the earliest. And even that requires the second quarter's operating leverage to hold through a big integration.
For the stock, that order matters. Shares trade at about $6.75 as of this writing, down about 70% from their 52-week high of $22.17, yet still about 12 times revenue, based on the midpoint of this year's guidance. That price already assumes the growth keeps coming, and I think it will.
But anyone buying the growth stock should expect red ink for years while the top line does the work. I'd avoid buying shares here until the loss line proves it can keep narrowing through the integration.
John Collins arrives as CFO after holding three senior roles at LivePerson Summary
SoundHound acquired LivePerson and retired its debt by issuing 36.9 million Class A shares.
SoundHound AI Inc. SOUN completed its acquisition of LivePerson LPSN and named John Collins as the new CFO of the combined company. LivePerson stock stops trading on Nasdaq. Shares of SoundHound were down 0.52% intraday. The company disclosed no purchase price.
Collins held the CFO, COO and interim CEO roles at LivePerson. He led a shift from more than $100 million of annual cash burn to positive free cash flow inside a year, alongside cost reduction programs exceeding $200 million and debt restructurings that captured $227 million of discount.
SoundHound retired LivePerson's outstanding debt at close, leaving the balance sheet debt-free. Holders of LivePerson's first and second lien secured notes released the debt in exchange for 36,894,839 shares of SoundHound Class A stock, registered for resale the same day. That's worth roughly $249 million at the current price of $6.74.
Management is targeting more than $500 million in future revenue from the existing customer base alone, while Gartner forecasts that enterprise spending on agentic AI software will reach $985 billion by 2030.
Disclosures I am/we currently own positions in the stocks mentioned, and have NO plans to sell some or all of the positions in the stocks mentioned over the next 72 hours.
SoundHound AI (SOUN +0.00%) was once a darling of the artificial intelligence trend, and its stock skyrocketed to nearly $25 per share at the end of 2024. But it has spent a lot of the time since then selling off, and now trades for less than $7 per share. However, that doesn't mean its business hasn't been performing impressively in the meantime.
The reality is that the stock got ahead of itself during its late 2024 run-up, but the company hasn't misstepped since then. It's delivering impressive results and growing at a solid pace. But has that primed the stock to double over the next year?
Image source: Getty Images.
SoundHound AI combines artificial intelligence with powerful speech recognition. This has countless applications, but the biggest area of adoption right now is in restaurant order automation, specifically in drive-thrus. This is a fairly low-stakes application, and with a limited menu, there aren't many things for an AI to recognize and understand.
Eventually, SoundHound AI aims to become a larger part of customer service, particularly in industries such as banking, healthcare, and insurance. Companies in these sectors spend significant sums to staff their customer service lines; if SoundHound AI's product could automate a significant number of their interactions with customers, it would be one of the most useful AI applications to date.
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SoundHound AI has several clients in these industries performing trials of its software and developing use cases for it. Investors will need to keep an eye on this: If the company's services prove to be a hit with large organizations, those types of contracts could take off and send the stock soaring.
Even with many trials underway, SoundHound AI's revenue rose 45% year over year to $62 million in Q2. The company is nowhere near profitable, but it has plenty of cash on the books to keep its operations going while it works its way toward that goal. There's a viable enough business model here that it should be able to raise capital to continue operations if it needs to, so investors shouldn't worry about SoundHound AI running out of funding.
The question is, how long will it be before SoundHound AI's software really takes off in the marketplace? That's the real unknown with the stock. Moreover, it could still lose out to another AI company's rival voice-interface offering. This makes SoundHound AI a high-risk, high-potential reward stock, but the stock is priced about right for that.
SOUN PS Ratio data by YCharts.
SoundHound AI trades for less than 15 times sales, which isn't a bad price to pay for a company growing this fast in a market that's potentially huge.
I'm not sure if SoundHound AI stock can double over the next year, but if sales of its software start to take off, I think it has a strong chance to soar. Otherwise, it may hang out in the sub-$10 range for the foreseeable future.
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SANTA CLARA, Calif., Sept. 04, 2026 (GLOBE NEWSWIRE) -- SoundHound AI, Inc. (Nasdaq: SOUN), a global leader in voice and agentic AI, today announced the successful completion of its acquisition of LivePerson, Inc., and the appointment of John Collins as the combined company’s Chief Financial Officer.
With the transaction officially closed, SoundHound AI immediately expands its market footprint, with a customer base that includes 25 of the Fortune 100, and a strengthened IP portfolio of over 750 patents. The combination brings together LivePerson's extensive enterprise digital messaging infrastructure with SoundHound's proprietary voice agentic AI. LivePerson’s platform will be integrated into OASYS, SoundHound’s self-learning Orchestrated Agent System, which is the result of decades of innovation from SoundHound and its recent acquisitions. The unified platform will deliver a world-leading fully integrated, end-to-end customer engagement solution that operates natively across voice, web, mobile, SMS, and social channels.
"This merger represents a defining moment for the new agentic AI era. Together, we are delivering the most complete AI platform to the most comprehensive enterprise customer base in the industry," said Keyvan Mohajer, CEO and Co-Founder of SoundHound AI. "Now global brands have a single, unified engine to power intelligent customer interactions — scaling SoundHound’s reach to serve every enterprise, on every channel, at an unprecedented level."
Highlights of the closed transaction include a strong and fully debt-free combined balance sheet, establishing a resilient financial foundation for accelerated commercial growth and continuous product innovation. With expanded global scale, an enriched customer base spanning key enterprise verticals, and enhanced cross-selling capabilities, the unified company is strategically positioned to target more than $500M in future revenue from the existing customer base alone. The acquisition accelerates the combined company’s ability to address the rapid rise of agentic AI, with Gartner® forecasting that enterprise spend on the software will reach $985 billion by 2030.
New Chief Financial Officer Appointed
Following an extensive executive search, SoundHound AI has selected John Collins to join the company as its Chief Financial Officer. As CFO, Collins will focus on accelerating SoundHound AI’s path to sustainable profitability, while maintaining its strong growth trajectory and disciplined approach to capital allocation.
Collins brings over 15 years of leadership experience at the intersection of enterprise software, data science, capital markets, corporate finance, and artificial intelligence. With a rare blend of operator expertise, financial stewardship, and entrepreneurial vision, he has previously been a founder, as well as Chief Financial Officer, Chief Operating Officer, and Interim Chief Executive Officer at LivePerson.
Throughout his career, Collins has consistently met the strategic and financial needs of the business, from supporting R&D innovation and high growth, to driving cost-optimization initiatives that yielded free cash flow and improved operational efficiency. Notably, Collins led a transformation from more than $100M of annual cash burn to positive free cash flow in a single year while supporting double-digit growth, executed cost-reduction programs in excess of $200M, and led multi-year debt restructurings that captured $227M of debt discount, improving liquidity and shifting enterprise value from debt holders to equity holders. This proven background in managing complex enterprise infrastructure equips Collins to drive the financial integration of SoundHound AI and LivePerson post-close, helping to create a world leader in AI for customer service.
The holder of both a JD and an MBA, Collins will oversee the combined company's financial strategy with a focus on accelerating margin expansion, enforcing tight cost discipline, and driving seamless operational synergies to capitalize on SoundHound AI’s expanded footprint and the rapidly growing agentic AI market.
"Joining SoundHound AI at this pivotal juncture is an extraordinary opportunity to help steer the company’s next phase of global growth at a time of rapid agentic AI adoption by large enterprises," said John Collins, incoming CFO of SoundHound AI. "Backed by a strong, debt-free balance sheet and market momentum, my focus will be on driving seamless operational integration, enforcing cost discipline, and accelerating our path to sustainable, high-margin profitability."
Day One Combination Value
With the closing following regulatory and shareholder approvals, integration is actively underway to deliver immediate value to customers and shareholders:
Unified Omnichannel Solutions: Enterprise customers can now deploy a single conversational AI platform capable of driving voice interactions, digital chat, and social messaging natively.Enhanced AI Capabilities for LivePerson Customers: SoundHound’s fully agentic platform, OASYS, and AI models will deliver improvements in performance, user experience, containment, and overall customer health across LivePerson’s enterprise customer base spanning digital and voice channels.Smarter, Faster AI Across Every Channel: By combining SoundHound’s deep voice capabilities with LivePerson’s proven digital engagement, enterprise deployments benefit from an even richer foundation of customer interaction insights. This means higher containment rates, faster resolution times, and smoother experiences.Strengthened Financial Footprint: As part of the close, SoundHound has retired LivePerson’s outstanding debt, establishing a strong, debt-free balance sheet positioned to drive efficient growth. "Our shared focus is clear: accelerate innovation and deliver immediate impact for our customers," said John Sabino, CEO of LivePerson. "Together, we offer an unparalleled value proposition for enterprises seeking to modernize their contact centers and digital touchpoints with a trusted, enterprise-grade AI partner."
With the transaction closed, LivePerson common stock will cease trading on the Nasdaq stock market. Functional integration is already underway, with combined product offerings and expanded capabilities set to roll out to global clients in the coming quarters.
About SoundHound AI
SoundHound AI (Nasdaq: SOUN) is a voice and agentic AI company that enables businesses to deliver natural, end-to-end conversational experiences across digital and physical channels, including phones, kiosks, chat, smart devices, drive-thrus, TVs, in-vehicle, and more. Its agentic platform, OASYS, is a self-learning, orchestrated AI system where organizations can build and deploy conversational AI agents to handle transactions, tasks, and workflows on behalf of customers and employees. Built on proprietary technology backed by 750+ patents and years of AI research, SoundHound serves leading brands across industries including automotive, financial services, healthcare, retail, telecommunications, and more. It powers millions of products and processes billions of interactions annually for enterprise customers worldwide. Learn more at: www.soundhound.com
Forward Looking Statements
This press release contains "forward looking statements" within the meaning of the U.S. federal securities laws about the expectations, beliefs, plans, intentions, prospects, financial results and strategies relating to SoundHound AI’s acquisition of LivePerson. Such forward looking statements include, among others, statements regarding future product capabilities and offerings, expected benefits to SoundHound AI and LivePerson and their customers arising from and in relation to the acquisition, SoundHound AI’s plans for future operations and anticipated product offerings, the parties’ expectations for value creation and strategic advantages, market and growth opportunities, SoundHound AI’s anticipated revenue growth and profitability, future financial condition and performance and expected financial impacts of the acquisition, and the parties’ expectations, intentions, strategies, assumptions or beliefs about future events, results of operations or performance or that do not solely relate to historical or current facts.
These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "potential," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are predictions, projections and other statements about future events or conditions that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication. Factors that may cause actual results to differ materially from those in any forward looking statements include, without limitation, the effect of the acquisition on SoundHound AI’s or LivePerson’s business, operating results, and relationships with customers, suppliers, competitors and others; risks that the acquisition may disrupt SoundHound AI’s or LivePerson’s current plans and business operations; failure to realize the anticipated benefits of the acquisition; challenges or delays in assimilating or integrating LivePerson’s technology into SoundHound AI’s platform; challenges retaining employees of LivePerson; unanticipated obligations or liabilities related to LivePerson’s legacy business; potential adverse tax consequences and the potential effects on the accounting of the acquisition; changes in applicable laws or regulations and extensive and evolving government regulations that impact SoundHound AI’s or LivePerson’s operations and business; investigations, claims, disputes, enforcement actions, litigation and/or other regulatory or legal proceedings, including with respect to AI technology; risks that SoundHound AI may not be able to manage strains associated with its growth; dependence on key personnel; stock price volatility; SoundHound AI’s and LivePerson’s ability to protect their intellectual property and related litigation risks; the risk that LivePerson’s usage patterns, customer renewals, customer outcomes and similar metrics differ from expectations; the risk of cybersecurity incidents or breaches impacting LivePerson’s business; risks related to the use and regulation of artificial intelligence and machine learning; changes in business, market, financial, political and regulatory conditions; and disruption to SoundHound AI’s business and diversion of our management’s attention and other resources. The foregoing list of risk factors is not exhaustive. Further information on factors that could affect our financial and other results is included in the filings that SoundHound AI and/or LivePerson filed, or that will be filed, with the U.S. Securities and Exchange Commission.
All forward-looking statements are based on information available to SoundHound AI as of the date hereof, and SoundHound AI assumes no obligation to update any forward-looking statements, except as may be required under applicable securities laws.
With about 40% short interest, SoundHound AI (SOUN -0.59%) is one of the most shorted stocks in the market. The company has been growing its revenue quickly, but a pending merger with troubled LivePerson (LPSN +0.00%) has investors betting against the stock. However, heavy short interest is a double-edged sword.
If a stock has high short interest, there is usually a bearish case to be made against it. In the case of SoundHound AI, its merger with LivePerson will bring considerable debt and a business currently in decline. There is also a good chance that SoundHound AI will seek a future equity raise to pay off the debt it is taking on as part of the deal, as it has stated it will work to quickly retire the debt through a combination of cash and stock.
The flip side is that heavily shorted stocks can see huge short squeezes if they can prove the skeptics wrong. With LivePerson, SoundHound AI is gaining access to a large, established, albeit declining, customer base, especially in call centers and the customer service space.
Its goal will be to retain these customers and switch them to its more comprehensive and higher-priced AI voice technology and agentic AI platform. If the company can stabilize churn and upsell customers, this deal could be a huge boon for this growth stock.
Image source: The Motley Fool.
SoundHound AI's core business, meanwhile, continues to perform well, and it's already shown it can integrate acquisitions well. Its earlier purchase of Amelia and its virtual agents helped it expand into new market verticals and provided key technology for its new voice-native agentic AI orchestration platform, OASYS.
The company has said that the launch of OASYS has increased excitement and accelerated deals, and that it is winning in demos, RFPs (requests for proposals), and pilots. The platform's ability to build AI agents and self-improve has been a big selling point, and it has been seeing pilots convert to large implementations at a record pace. Management noted that the platform has seen rapid adoption across verticals since its May launch, including a large eight-figure deal signed in less than 90 days after the initial demo.
Overall for Q2, SoundHound AI saw its revenue climb 45% to $61.9 million. However, the company does remain unprofitable, with an adjusted loss of $0.02 and negative adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $9.6 million. Its gross margin rose 610 basis points year over year to 45.1%, while its adjusted gross margins were flat year over year at 58.4%. It said acquisitions continued to have a temporary impact on its gross margins and that its goal is to still exceed 70% in the future.
Looking ahead, the company raised the low end of its full-year revenue guidance to $230 million to $260 million. That's up from a prior outlook of $225 million to $260 million. It is expecting its acquisition of LivePerson to close by the end of the year. If it does, it is projected to generate at least $350 million of revenue in 2027.
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SoundHound AI's stock has struggled over the past year, with its shares cut in half. However, the stock is still not cheap, trading at a forward price-to-sales (P/S) ratio of over 12 times current-year estimates. With the company not profitable and burning cash, that alone makes it a more speculative bet. The acquisition of LivePerson, meanwhile, adds some additional risk.
That said, the company has shown it can do a good job integrating acquisitions, and it has a huge opportunity with OASYS, both with existing customers and the ones it is acquiring from LivePerson.
Despite the huge short interest, I think investors can place a small speculative bet that SoundHound AI can pull this deal off, given the early momentum it has been seeing with OASYS.
The Zacks Computers – IT Services industry is benefiting from accelerating enterprise adoption of artificial intelligence (AI), particularly generative and agentic AI. Enterprises are increasingly moving AI initiatives beyond pilots into production and embedding AI platforms within core operations. Growing AI adoption is also accelerating application, data and cloud modernization spending. Enterprises increasingly recognize that legacy applications, fragmented data environments and older infrastructure must be modernized before AI can be deployed effectively at scale. This is boosting demand for data engineering, application modernization, cloud migration and platform-engineering services. The industry is also gaining from rising demand for cybersecurity, digital identity, secure networking and regulatory-compliance solutions. Industry participants, including SoundHound AI (SOUN - Free Report) , Grid Dynamics (GDYN - Free Report) and Telos (TLS - Free Report) , are benefiting from these trends.
Industry Description The Zacks Computers – IT Services industry comprises companies that provide consultancy, communications software and services, IT management and operations, cloud-based web development platform, customer relationship management, professional information solutions, real estate information and analysis, and outsourcing services. Industry participants cater to a wide array of end markets, including manufacturing, telecommunications, banking, insurance, healthcare, government agencies and public sector institutions. They focus on the cybersecurity business, the cloud computing market, generative AI, IoT and automation to bolster prospects. Offerings from industry participants help improve engagement with customers, launch products and support new business models, with enterprises going for digital transformation.
What's Shaping the Future of the Computers - IT Services Industry The Digitization Wave is a Tailwind: Most industry participants are modernizing their traditional legacy-oriented business processes to keep pace with evolving IT services. The aim is to integrate the coordination of emerging technologies, including cloud, IoT, AI and analytics. Increasing Internet penetration in emerging markets, particularly across the Asia Pacific, is another tailwind.
Automation and Productivity Improvement: Enterprises are increasingly deploying AI to automate manual workflows, improve customer service, shorten development cycles and lower infrastructure costs. Higher productivity is also enabling IT service providers to increasingly adopt fixed-price and outcome-based engagements, creating opportunities for stronger operating leverage as AI-enabled delivery models mature.
Improving IT Spending to Aid Prospects: Improving IT spending trends bode well for industry participants. Gartner projects IT spending to increase 14.2% over the 2025 figure of $5.577 trillion to $6.369 trillion in 2026. Spending on IT services is expected to see a 5.3% improvement in 2026.
Zacks Industry Rank Indicates Bright Prospects The Zacks Computers - IT Services is housed within the broader Zacks Computer and Technology Sector. It currently carries a Zacks Industry Rank #98, which places it in the top 40% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. The aggregate earnings estimate revisions show that analysts are optimistic about this group’s earnings growth potential. Since Feb. 28, 2026, the industry’s earnings estimate for the current year has increased by a nickel.
Given the industry’s bullish prospects, there are a number of stocks worth buying. But before we present the stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Lags Sector and S&P 500 The Zacks Computers - IT Services Industry has underperformed the S&P 500 and the broader Zacks Computer and Technology sector in the past year.
The industry has dropped 16.2% over this period compared with the S&P 500’s and the broader sector’s returns of 19.2% and 26.8%, respectively.
One-Year Price Performance
Industry's Current Valuation On the basis of the forward 12-month price/earnings, which is a commonly used multiple for valuing IT Services companies, the industry is currently trading at 18.48X, lower than the S&P 500’s 19.91X and the sector’s 20.31X.
Over the past five years, the industry has traded as high as 39.95X and as low as 16.83X, with the median being 27.63X, as the charts below show.
Price/Earnings (F12M)
3 IT Services Stocks to Buy Right Now Grid Dynamics: This Zacks Rank #1 (Strong Buy) company’s shares have dropped 13.1% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
Grid Dynamics is benefiting from rapid AI adoption and expansion of the GAIN platform. AI revenues reached 30.7% of total revenues and jumped 54.6% year over year. Customers are moving AI workloads from pilots into production, adopting GAIN more broadly and awarding GDYN new programs. Vendor consolidation is helping GDYN gain wallet share and larger programs at major customers. Hyperscaler partnerships with Google Cloud, AWS and Microsoft Azure are also supporting AI-led opportunities.
The Zacks Consensus Estimate for Grid Dynamics’ 2026 earnings is pegged at 42 cents per share, unchanged over the past 30 days. The figure indicates 5% growth from the figure reported in 2025.
Price and Consensus: GDYN
Telos: This Zacks Rank #1 company benefits from stronger-than-expected Telos ID adoption, with TSA PreCheck and the Defense Manpower Data Center programs performing above expectations. Telos has submitted proposals representing roughly $500 million of total contract value, concentrated mainly in Security Solutions, with award decisions expected over the coming quarters. These awards could become a meaningful growth driver, particularly for 2027.
For 2026, the consensus mark for earnings has increased by a couple of cents to 15 cents per share, which suggests 66.67% growth from the figure reported in 2025. Telos shares have decreased 7.6% year to date.
SoundHound AI (SOUN -1.02%) has been one of the most hotly debated artificial intelligence (AI) stocks on Wall Street. It has swung wildly between less than $6 per share and more than $22 per share over the past 12 months. Today, the stock changes hands at about $7, putting it near the bottom of its 52-week range.
The question for investors is whether this dip is a buying opportunity or whether SoundHound AI is a once-trendy stock that has lost its luster.
The company's voice AI platform interacts with people via normal conversation, allowing them to talk to cars or digital devices, or have interactions with businesses without the need for a human employee on the other end of the line. There are big opportunities for those services, but there's also a lot of competition.
My prediction is that SoundHound AI stock will rise by roughly 25% over the next year or so. However, the path forward might remain volatile.
Image source: The Motley Fool
SoundHound AI is continuing to put up growth Just a few years ago, SoundHound AI was doing less than $50 million in annual revenue. This year, Wall Street analysts estimate that it will reach $237 million in revenue.
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The company built its name primarily in the automotive industry, providing in-vehicle voice assistants. But SoundHound AI has branched out into new industries including restaurants, hospitality, and customer service. Acquisitions have been a big part of that process, including its pending purchase of LivePerson at an enterprise value of about $250 million.
LivePerson is heavily involved in the customer service industry, and its existing client base includes 25 Fortune 100 companies. Assuming the deal closes, SoundHound AI's management believes the combined company could generate between $350 million and $400 million in revenue in 2027.
How high might the stock go? Here's your answer Suppose SoundHound AI 2027 revenue lands at $375 million -- right in the middle of that guidance range.
Today, its market cap is $3.2 billion. That's about 8.5 times SoundHound AI's expected sales next year. If the stock goes nowhere between now and the end of 2027, the stock would trade near its lowest valuation over the past three years. In that context, I'd say it has some room for upside.
SOUN PS Ratio data by YCharts.
SoundHound AI isn't profitable, so investors should be careful about how high a valuation they bake into their expectations. That said, the company was much smaller and riskier back in early 2024. It shouldn't be a stretch for the stock to command a higher valuation if the business is performing well.
At 12 times 2027 revenue, SoundHound AI would have a market cap of about $4.5 billion. I'll even add $300 million to SoundHound AI's base market cap to account for new stock that it could issue between now and then. Even still, that would imply roughly 25% upside from a hypothetical $3.5 billion base value.
SoundHound AI stock has been highly volatile. But right now, it's hard not to like the setup for this stock, especially given that the company continues to impress.
Key Takeaways SOUN signed a seven-figure healthcare deal and secured multiple expansions and renewals.A top-20 healthcare provider quadrupled its spending with SoundHound in the second quarter of 2026.OASYS can cut complex healthcare deployment times from months to minutes, supporting broader adoption. SoundHound AI’s (SOUN - Free Report) healthcare business is emerging as a potentially important growth driver as enterprises increasingly adopt conversational and agentic AI for complex customer-service workflows. In the second quarter of 2026, SoundHound signed a seven-figure deal with a nationally ranked healthcare system employing 30,000 people. It also added Champion Payer Solutions, expanded business with healthcare and electronic-health-record customers and secured several renewals across nursing, rehabilitation and biopharmaceutical organizations.
The expansion appears to extend beyond new customer wins. Management said that a top-20 healthcare provider quadrupled its spending with SoundHound during the second quarter of 2026, while five additional healthcare organizations expanded or renewed contracts. This traction is particularly encouraging because healthcare requires strong security, traceability and reliability for mission-critical workflows, areas where SoundHound believes its OASYS platform has an advantage.
OASYS could further strengthen this opportunity by reducing deployment times for complex healthcare applications from months to minutes. SoundHound is also preparing to move one of its largest healthcare customers onto its proprietary models after seeing improvements in cost, accuracy and latency.
Still, healthcare revenues are not separately disclosed, making its financial contribution difficult to quantify. SoundHound remains loss-making despite second-quarter 2026 revenues rising 45% to $61.9 million. Nevertheless, accelerating customer spending, renewals and larger contracts suggest healthcare could become a meaningful new growth engine if adoption continues to scale.
How SoundHound Compares With Healthcare AI PeersNICE (NICE - Free Report) is a relevant competitor as healthcare organizations increasingly automate patient engagement, contact-center workflows and customer service. NICE offers AI-driven customer experience and workforce solutions that can help providers manage high call volumes, improve routing and automate routine interactions. NICE also benefits from an established enterprise customer base and broad contact-center capabilities. However, SoundHound’s OASYS platform emphasizes conversational and agentic AI, proprietary voice models and faster deployment, potentially giving it an edge in complex voice-first healthcare use cases.
Five9 (FIVN - Free Report) is another key rival, providing cloud contact-center software and AI-powered automation across industries, including healthcare. Five9 helps organizations deploy virtual agents, automate customer interactions and improve agent productivity. Five9’s mature cloud platform and integrations strengthen its competitive position. Still, SoundHound’s healthcare momentum, growing customer spending and ability to build self-optimizing AI agents could differentiate it as healthcare providers seek more advanced automation.
SOUN’s Price Performance, Valuation & EstimatesSoundHound’s shares have lost 28.7% year to date (YTD), underperforming the industry, as shown below.
SOUN’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, SOUN trades at a forward price-to-sales (P/S) multiple of 12.65, slightly above the industry’s average.
SOUN’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Over the past 30 days, the Zacks Consensus Estimate for SoundHound’s 2026 and 2027 loss per share has narrowed to 16 cents and 13 cents, respectively, as shown below. The expected loss for 2026 remains wider than the previous year’s loss of 13 cents per share.
Image Source: Zacks Investment Research
SOUN currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways VRT is benefiting from AI infrastructure demand, with higher-density power and thermal needs driving growth.SOUN raised its 2026 revenue outlook to $230-$260 million on accelerating enterprise AI adoption.G expects Agentic Operations to grow at least 25% in 2026, with Agentic Solutions topping $1 billion in TCV. The Zacks-defined Computers – IT Services industry has been benefiting from the ongoing digitization efforts globally. Robust spending on cloud, Internet of Things, cybersecurity, data analytics, artificial intelligence (AI) and automation is driving industry-wide growth.
We have narrowed our search to three stocks from the industry with a favorable Zacks Rank. These are: Vertiv Holdings Co. (VRT - Free Report) , SoundHound AI Inc. (SOUN - Free Report) and Genpact Ltd. (G - Free Report) . Each of our picks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows the price performance of our three picks year to date.
Image Source: Zacks Investment Research
Vertiv Holdings Co.Zacks Rank #2 VERTIV has been benefiting from demand for AI infrastructure, expanding data center complexity and continued investment in capacity and technology. Management emphasized that AI and general compute demand are driving larger and more infrastructure-intensive deployments. VRT’s power, cooling and services portfolio positions it to support next-generation data center expansion.
Rising Power and Thermal Requirements for AI Data CentersVRT is focused on evolving power architectures as AI workloads require greater density. The company is developing solutions supporting multiple architectures, including 800-volt DC systems, while continuing to serve traditional AC-based deployments.
Vertiv is working with NVIDIA Corp. (NVDA - Free Report) and VisionBay AI on AI data center deployments in Taiwan, including power, thermal and services solutions for NVIDIA GB300 systems. VRT said that these projects demonstrate demand for higher-density infrastructure.
Vertiv also emphasized thermal management capabilities, including liquid cooling and closed-loop cooling systems designed to reduce water usage in data center operations. Management said that these solutions expand its differentiation in long-term infrastructure services.
Strong GuidanceFor the third quarter of 2026, VRT expects net sales of $3.65 billion to $3.85 billion and adjusted earnings of $1.77 to $1.83 per share. Adjusted operating profit is projected to be between $898 million and $938 million, with an adjusted operating margin of 24% to 25%.
For 2026, net sales are now forecast in the range of $13.8 billion to $14.2 billion, up $250 million at the midpoint from the prior guidance. Adjusted earnings are projected in the range of $6.65 to $6.75 per share, while adjusted operating profit is expected between $3.29 billion and $3.37 billion. Adjusted free cash flow guidance was raised to $2.4 billion-$2.6 billion.
Solid Estimate RevisionsVertiv has an expected revenue and earnings growth rate of 36.6% and 58.1%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 3.6% over the last 30 days.
VRT has an expected revenue and earnings growth rate of 29.2% and 33.9%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 3.3% over the last 30 days.
Image Source: Zacks Investment Research
Robust Price Upside PotentialThe short-term average price target of brokerage firms represents an increase of 31.8% from the last closing price of $257.08. The brokerage target price is currently in the range of $245-$412. This indicates a maximum upside of 60.2% and a downside of 4.7%.
SoundHound AI Inc.SoundHound has seen record-high revenue growth in the last reported quarter driven by accelerating enterprise adoption of its OASYS agentic AI platform. SOUN’s expanding enterprise customer base, leadership in voice and agentic AI and debt-free balance sheet support its long-term growth outlook.
Growing Adoption of Conversational and Agentic AISOUN is benefiting from the rising enterprise adoption of conversational and agentic AI as businesses increasingly automate customer interactions across voice, chat and digital channels. The company has expanded beyond its traditional automotive business into restaurants, retail, healthcare, financial services, telecommunications, energy and other enterprise verticals, creating multiple long-term growth avenues.
One of the industry's most differentiated independent voice AI platforms has been built by SOUN with nearly two decades of research and development. Its proprietary Speech-to-Meaning and Deep Meaning Understanding technologies enable faster, more accurate conversational AI than traditional speech-to-text architectures.
SOUN’s technology is now backed by more than 400 patents, while OASYS combines capabilities from SoundHound and acquired businesses into a unified platform for conversational and agentic AI. Currently, SOUN carries a Zacks Rank #2 (Buy).
Strong GuidanceSoundHound AI raised its full-year 2026 revenue outlook to $230 - $260 million following strong second-quarter results.
Strong Estimate RevisionsSoundHound AI has an expected revenue and earnings growth rate of 41% and -23.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.1% over the last 30 days.
SOUN has an expected revenue and earnings growth rate of 14.6% and 14.7%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 13.3% over the last 30 days.
Image Source: Zacks Investment Research
Huge Price Upside PotentialThe short-term average price target of brokerage firms represents an increase of 68.8% from the last closing price of $7.11. The brokerage target price is currently in the range of $7-$16. This indicates a maximum upside of 125% and a downside of 1.6%.
Genpact Ltd.Genpact is poised for growth with AI-driven solutions, including the Digital Smart Enterprise Process (SEP) approach and Genpact Cora platform, which are accelerating clients’ digital transformations. Genpact combines process expertise with analytics, digital technology and consulting across mission-critical workflows, which supports client acquisition and broader account penetration.
AI-Led Mix ShiftGenpact’s Agentic Operations strategy extends its long-standing process expertise into data, AI, digital technology, advisory and agentic solutions. Management expects this business to grow at least 25% in 2026. Agentic Solutions are on track to exceed $1 billion of total contract value in 2026.
G’s Digital SEP is a patented approach to enhance the performance of clients’ business processes using AI. Digital SEPs decrease inefficiency and improve process quality using AI, advanced domain-specific digital technologies, Lean Six Sigma methodologies, and experience-centric principles.
Genpact Cora is an automation-to-AI-based platform that combines the company’s proprietary automation, analytics and AI technologies into a single common platform, accelerating clients’ digital transformations. We believe that G is well-positioned to take advantage of future AI advancements.
Strong GuidanceFor the third quarter, Genpact expects revenues of $1.369-$1.382 billion. Adjusted earnings are projected at $1.04-$1.05 per share. For 2026, Genpact continues to expect reported revenue growth of at least 7%. Using the provided year-ago sales figure of $5.08 billion, this implies revenues of at least $5.44 billion.
The company also raised adjusted diluted earnings growth guidance to at least 12%. Its outlook reconciliation indicates adjusted earnings of $4.09 per share. Genpact expects a 36.5% gross margin and a 17.7% adjusted operating margin for the year.
Solid Estimate RevisionsGenpact has an expected revenue and earnings growth rate of 7% and 12.6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 30 days.
G has an expected revenue and earnings growth rate of 7.1% and 9.5%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 1.4% over the last 30 days.
Image Source: Zacks Investment Research
Impressive Price Upside PotentialThe short-term average price target of brokerage firms represents an increase of 10.9% from the last closing price of $38.02. The brokerage target price is currently in the range of $31-$58. This indicates a maximum upside of 52.6% and a downside of 18.4%.
QuantumScape and SoundHound AI trade at nearly identical market caps despite running completely different businesses, and one of them has yet to book a dollar of GAAP revenue. Figuring out which story deserves your money starts with understanding exactly what…
QuantumScape (NYSE:QS | QS Price Prediction) and SoundHound AI (NASDAQ:SOUN) both went public during the 2020 to 2022 market boom through special purpose acquisition companies (SPACs) rather than a traditional IPO, and they share striking similarities in their business models and market positioning, despite operating in different markets. One pursues solid-state lithium-metal batteries. The other sells voice and agentic AI. Yet the market values them similarly, and both just reported Q2 2026 results asking investors to fund an AI story. Only one has customers paying for it today.
Zero Revenue Meets Real Revenue That Still Loses Money QuantumScape reported no GAAP revenue in Q2, but recorded $10.8 million in customer billings. The net loss was $98.2 million, and liquidity stood at $859 million. Execution is the story, as the Eagle Line pilot showed uptime greater than 90%, and management plans to double cell output in the second half of 2026. A new multi-year partnership with Honda joins Volkswagen PowerCo, and cells shipped to a major American defense prime. These remain development partners rather than paying customers.
SoundHound posted $61.9 million in revenue, up 45% year-over-year, with GAAP gross margin expanding from 39.0% to 45.1%. The GAAP net loss narrowed to $42.82 million, and adjusted EBITDA loss shrank 33% year-over-year. Enterprise wins spanned Five Guys, IHOP, Jersey Mike’s, and Ruby Tuesday, plus expanded live generative AI at Stellantis and Hyundai. CEO Keyvan Mohajer said, “Our pipeline has never been this big, and our win rate has never been this good.” Cash finished at $202.78 million. Revenue is here; profitability remains ahead.
Two Different Bets, Two Different Failure Modes Lens QuantumScape SoundHound AI Core Bet Scaling QSE-5 batteries into EVs, AI data centers (QSDC), and defense (QSAS) OASYS agentic AI platform monetizing across autos, restaurants, healthcare Failure Mode Manufacturing never scales; commercialization slips Voice AI commoditizes; margins never turn positive Market Cap ~$3.52 billion ~$3.12 billion The market is assigning similar valuations to two very different businesses. With QuantumScape, investors are buying optionality on a technology that could reshape energy storage. Volkswagen PowerCo’s commercialization target remains 2029. With SoundHound, investors are buying a live business with a raised FY2026 outlook of $230 million to $260 million and a pending LivePerson acquisition. SoundHound’s trailing price-to-sales ratio of 17 leaves little room for stumbles.
Checkpoints Worth Watching Into 2027 For QuantumScape, watch whether the Eagle Line ramp translates into first GAAP revenue and whether QSDC produces a named data-center customer. Shares closed at $5.72 on August 24, 2026, down 45.1% year to date. For SoundHound, the checkpoint is holding revenue growth above 40% while pushing gross margin toward management’s stated 70%+ long-term target. SoundHound closed at $7.00, down 29.8% year to date.
Not Suitable for a Retirement Sleeve SoundHound’s quarter is more investable today. Revenue is real, customer logos are named, and OASYS is winning pilots. The valuation demands flawless execution, and the $21 million in stock-based comp keeps dilution in view.
QuantumScape appeals only as a small speculative sleeve on manufacturing optionality (we wrote a free playbook on speculating with just 5% of a portfolio, with the sizing and exit rules that keep it from hurting). Both stocks burn cash and carry betas above 2.6. Neither stock belongs in a core retirement portfolio. Investors who hold either should size their positions accordingly and treat each earnings report as a checkpoint against the failure modes described above.
Contact [email protected] for any questions or corrections.
Shares of SoundHound AI (SOUN -1.52%) have slipped close to 30% in 2026, as of this writing, but the provider of conversational artificial intelligence (AI) solutions received a major shot in the arm this month following the release of its second-quarter results on Aug. 5.
SoundHound AI stock popped more than 10% the day following its earnings release. The company increased its full-year guidance owing to the growing traction of Oasys, which it claims is the world's first self-learning agentic AI platform that helps customers build and deploy AI agents that can evaluate and improve on their own.
We will take a closer look at SoundHound's prospects in this article and see why this fast-growing tech company could significantly enhance investors' wealth through the end of the decade.
Image source: The Motley Fool.
SoundHound AI is targeting lucrative marketsSoundHound AI reported a 45% year-over-year increase in Q2 revenue to $62 million. The company noted on the earnings call that its revenue in the previous quarter was 10x higher than in the same quarter four years ago, underscoring how quickly it has been growing.
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The good news for SoundHound investors is that the conversational AI market it operates in is estimated to grow at an annual pace of 24% through 2033, according to Grand View Research. The market size is estimated to jump from $17.7 billion in 2026 to nearly $79 billion by the end of the forecast period.
SoundHound's growth rate suggests that it is cornering a bigger share of this market. Importantly, the company's acquisitions and product development moves should ideally ensure it continues to gain share in this fast-growing niche. SoundHound management noted in its recent press release that the enterprise adoption of Oasys is playing a central role in boosting growth.
SoundHound management points out that it "signed an eight-figure commitment in less than 90 days from the initial demo to contract signature," which is impressive, given that Oasys was launched just three months ago. It is easy to see why Oasys has gained significant traction in the market. The agentic AI platform can be deployed in call centers, vehicle infotainment systems, restaurants, hospitality, retail, drive-thru chains, and other applications.
SoundHound believes Oasys could help it capitalize on the overall agentic AI software market, which the company notes could be worth a whopping $1 trillion in 2030, according to Gartner. In all, SoundHound is poised to capitalize on two durable catalysts: conversational AI and agentic AI.
Importantly, the company is focused on expanding its wings further in conversational AI with the acquisition of LivePerson, which it expects to close by the end of 2026. LivePerson seems like an ideal fit for SoundHound, as it enables enterprise customers to build conversational AI solutions, such as voice assistants, and helps them stay in touch with their clients across various channels.
SoundHound's acquisition of LivePerson should unlock another major growth opportunity for the company, enabling it to target the lucrative cloud communications market. Mordor Intelligence estimates that the cloud communications market could grow from $23.5 billion in 2026 to $45.6 billion in 2031.
In all, it is easy to see why analysts have become bullish about SoundHound's growth prospects for 2026 and 2027.
SOUN Revenue Estimates for Current Fiscal Year data by YCharts
However, they seem to be underestimating its growth potential. SoundHound expects $245 million in revenue in 2026 at the midpoint of its guidance range. That would be a 45% jump over last year. Also, the forecast for 2027 points toward a significant slowdown in growth, which seems unlikely considering SoundHound's expansionary moves, growing customer base, and the secular growth of the conversational AI market.
Stronger growth should send this stock soaring by the end of the decadeWe have seen that SoundHound AI is outpacing the 24% annual growth rate projected for the conversational AI market. Also, the company's foray into the cloud communications space is another reason why we can expect it to easily outperform consensus expectations over the long run.
Assuming SoundHound's revenue grows at 45% between 2027 and 2030 (in line with its projected growth in 2026), its top line could reach $1.1 billion by the end of the decade. If this AI stock trades at 8 times sales at that time, almost in line with the U.S. tech sector's average sales multiple, its market cap could reach $8.8 billion.
That's 2.8x SoundHound's current market cap, which will be enough for this tech stock to reach a price of $20 by 2030. So, investors looking to buy and hold a top AI stock for the long run can consider adding SoundHound to their portfolios, considering its healthy upside potential.
Key Takeaways SOUN gets the edge on faster growth, improving estimates and broader agentic AI exposure.OASYS accelerates enterprise deals as SoundHound expands across finance, healthcare, telecom and restaurants.Cerence leads on valuation, profitability and free cash flow, but its 2027 revenue outlook is weaker. SoundHound AI, Inc. (SOUN - Free Report) and Cerence Inc. (CRNC - Free Report) are prominent players in conversational and voice artificial intelligence. SoundHound is building a diversified voice and agentic AI platform spanning enterprises, restaurants, automotive, healthcare and other industries, while Cerence remains deeply rooted in automotive AI and is expanding its next-generation technology into adjacent markets.
The comparison is increasingly relevant as both companies capitalize on growing demand for generative and agentic AI. SoundHound is pursuing faster growth and broader enterprise adoption, while Cerence is emphasizing profitable growth, recurring connected services and commercialization of its xUI platform.
Let's dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.
The Case for SoundHound StockSoundHound's growth trajectory remains compelling. Second-quarter 2026 revenues surged 45% year over year to a record $61.9 million, while non-GAAP gross margin was 58.4%. Adjusted EBITDA loss improved to $9.6 million from $14.3 million a year earlier, and non-GAAP loss narrowed to 2 cents per share.
The OASYS agentic AI platform is emerging as a major catalyst. Management said that OASYS has accelerated enterprise deals and helped SoundHound expand across financial services, healthcare, telecommunications and restaurants. The company's restaurant footprint continues to broaden, while Voice Commerce opens another opportunity through in-vehicle and connected-device transactions. Its proprietary Polaris speech foundation model and specialized AI models should also improve control, efficiency and potentially margins over time.
SoundHound's pending acquisition of LivePerson could substantially expand its enterprise footprint and strengthen its omnichannel conversational AI capabilities. The company expects the transaction to close before year-end after securing key regulatory clearances. SoundHound also raised its 2026 revenue outlook to $230-$260 million. Its balance sheet provides support, with $203 million of cash and no debt at June-end. However, operating cash outflow remains significant, and continued losses, acquisition integration and heavy investment create execution risks.
The Case for Cerence StockCerence offers a more mature financial profile. Fiscal third-quarter 2026 revenues rose 12% year over year to $69.6 million, while adjusted EBITDA increased 50% to $13.5 million. Free cash flow reached $19.6 million, demonstrating Cerence's stronger current cash-generation profile.
The company’s automotive position remains a key competitive advantage. Cerence technology is represented across roughly half of worldwide auto production on a trailing-12-month basis, providing a large installed base from which to expand connected and next-generation services. Cerence xUI is moving into commercialization, with a new multi-brand Stellantis award and programs involving several major global automakers. Management expects xUI to deliver higher revenue per vehicle and become a more meaningful contributor in fiscal 2027 and beyond.
Connected services are another bright spot, with revenues growing more than 20% in the latest quarter. Cerence is also pushing beyond automotive through agentic AI and its Mobile Work Agent, potentially reducing its dependence on vehicle production over time.
Yet that transition is still developing. Variable license revenues declined in the latest quarter, reflecting lower production volumes and OEM mix, while fixed-license revenue can make quarterly comparisons volatile. Cerence expects xUI and non-automotive initiatives to contribute more materially from fiscal 2027 onward. Encouragingly, management raised full-year free cash flow guidance to $76-$82 million and is balancing investment with debt reduction and a newly authorized share-repurchase program.
Recent Momentum Favors SoundHound StockBoth stocks have struggled in 2026. SoundHound and Cerence shares have plunged 29.8% and 29.1% year to date (YTD), respectively, compared with a 13.7% decline for the Zacks Computers – IT Services industry. Both have also substantially underperformed the broader Zacks Computer and Technology sector and S&P 500, as shown below.
SOUN vs CRNC Price Performance (YTD)
Image Source: Zacks Investment Research
Near-term momentum, however, favors SoundHound. SOUN has gained 9.2% over the past month, whereas CRNC has lost 8.7%. That divergence suggests investors have responded more positively to SoundHound's accelerating enterprise AI growth and improved outlook.
SOUN vs CRNC Price Performance (1-Month)
Image Source: Zacks Investment Research
Cerence Stock Holds the Clear Valuation AdvantageOn a forward 12-month price-to-sales basis, SoundHound trades at 11.93X versus just 1.16X for Cerence and 12.26X for the industry. SoundHound therefore trades slightly below the industry multiple but commands a massive premium to Cerence.
SOUN vs CRNC Valuation (P/S F12M)
Image Source: Zacks Investment Research
Cerence clearly wins on valuation. Its low sales multiple, positive cash generation and improving profitability offer a greater margin of safety. SoundHound's richer valuation requires sustained high revenue growth, successful execution of OASYS and continued progress toward profitability. Any growth disappointment could therefore create greater downside risk for SOUN.
Estimate Revisions Give SoundHound an EdgeSoundHound's estimate trend is encouraging. Over the past 30 days, the Zacks Consensus Estimate for its 2026 loss has narrowed to 16 cents per share from 18 cents. Revenues are projected to rise 41% in 2026. For 2027, SoundHound is expected to post a loss of 13 cents per share on revenues of $273 million, implying another 14.6% top-line increase.
SOUN EPS Estimate Revision Trend
Image Source: Zacks Investment Research
Cerence presents a mixed picture. Its 2026 EPS estimate has risen to 65 cents from 63 cents over the past 30 days, but the 2027 estimate has declined to $1.08 from $1.22. Revenues are expected to grow 24.5% in 2026 before declining 6.8% to $293 million in 2027, although EPS is projected to increase 65.4%. The downward 2027 estimate revision and weaker projected revenue trajectory temper Cerence's profitability advantage.
CRNC EPS Estimate Revision Trend
Image Source: Zacks Investment Research
SOUN Stock Looks Like the Better BuyCerence, currently carrying a Zacks Rank #3 (Hold), wins on valuation, current profitability and free cash flow. Its entrenched automotive position, expanding connected-services business and xUI commercialization provide meaningful long-term opportunities. Management's improved balance-sheet discipline and capital returns further strengthen the investment case.
SoundHound, however, offers the stronger growth profile. OASYS adoption, diversification across multiple industries, Voice Commerce, proprietary AI models and the pending LivePerson acquisition provide more avenues for expansion. This Zacks Rank #2 (Buy) company's improving loss estimates and strong recent share-price momentum add to the case. Despite its substantially higher valuation and continued losses, SoundHound's faster growth, improving earnings outlook and broader agentic AI opportunity give SOUN the edge over CRNC for investors seeking greater upside potential. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SoundHound (SOUN -1.52%) is chasing a future where voice replaces more taps, apps, and screens. If its technology becomes the neutral interface inside cars, restaurants, and TVs, the opportunity could expand dramatically. But Apple (AAPL +1.63%) has a formidable advantage, making the battle over who controls the next digital interface critical for SoundHound investors.
Stock prices used were the market prices of Aug. 14, 2026. The video was published on Aug. 23, 2026.
Rick Orford has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends SoundHound AI. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
SoundHound AI, Inc. (SOUN - Free Report) closed the last trading session at $7.22, gaining 17.6% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $11.57 indicates a 60.3% upside potential.
The mean estimate comprises seven short-term price targets with a standard deviation of $3.21. While the lowest estimate of $7.00 indicates a 3.1% decline from the current price level, the most optimistic analyst expects the stock to surge 121.6% to reach $16.00. It's very important to note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.
While the consensus price target is highly sought after by investors, the ability and unbiasedness of analysts in setting price targets have long been questionable. And investors making investment decisions solely based on this tool would arguably do themselves a disservice.
But, for SOUN, an impressive average price target is not the only indicator of a potential upside. Strong agreement among analysts about the company's ability to report better earnings than they predicted earlier strengthens this view. While a positive trend in earnings estimate revisions doesn't gauge how much a stock could gain, it has proven to be powerful in predicting an upside.
Price, Consensus and EPS Surprise
Here's What You Should Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.
While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?
They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.
However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.
That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.
Why SOUN Could Witness a Solid UpsideThere has been increasing optimism among analysts lately about the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher. And that could be a legitimate reason to expect an upside in the stock. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Over the last 30 days, the Zacks Consensus Estimate for the current year has increased 26.5%, as four estimates have moved higher compared to no negative revision.
Moreover, SOUN currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Therefore, while the consensus price target may not be a reliable indicator of how much SOUN could gain, the direction of price movement it implies does appear to be a good guide.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?
Let's take a look at what these Wall Street heavyweights have to say about SoundHound AI, Inc. (SOUN - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
SoundHound AI currently has an average brokerage recommendation (ABR) of 1.75, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by eight brokerage firms. An ABR of 1.75 approximates between Strong Buy and Buy.
Of the eight recommendations that derive the current ABR, five are Strong Buy, representing 62.5% of all recommendations.
Brokerage Recommendation Trends for SOUN
Check price target & stock forecast for SoundHound AI here>>>
The ABR suggests buying SoundHound AI, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABRAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Is SOUN Worth Investing In?Looking at the earnings estimate revisions for SoundHound AI, the Zacks Consensus Estimate for the current year has increased 26.5% over the past month to -$0.16.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for SoundHound AI. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for SoundHound AI may serve as a useful guide for investors.
SoundHound AI (SOUN +3.87%) just released its earnings for the second quarter of 2026. Although it reported considerable revenue growth and increased its revenue guidance, the stock is now close to 52-week lows. Consequently, it trades at more than 70% below its all-time high.
Moreover, profitability seems to remain out of reach, and although its valuation is at multi-year lows, it is still a relatively expensive stock. Knowing these facts, is SoundHound AI stock now a buy, or should investors continue to stay on the sidelines?
Image source: The Motley Fool.
SoundHound AI continues to prosper SoundHound AI continues to benefit from high demand for its conversational AI tools. Businesses as diverse as restaurants and automobile companies have applied its technology to make their operations more efficient.
Investors should also note its new platform called the Orchestrated Agent System (OASYS). The OASYS builds AI agents that can speak with customers, handle transactions, and resolve issues with service. Additionally, its AI can improve as it learns from customer interactions.
Thanks to this technology, SoundHound AI's systems now handle over 10 billion conversations annually. Furthermore, it now holds over 400 patents related to its technology, helping it compete with the largest tech enterprises in terms of speed and accuracy.
However, investors need to remember that its size is a tiny fraction of said big tech enterprises. For example, SoundHound has a market cap of around $3 billion, but that is less than one-one-thousandth of Google parent Alphabet's market cap.
Alphabet has pledged to spend between $195 billion and $205 billion on capital expenditures this year, raising some doubts about its finances. Nonetheless, that still leaves Alphabet in better financial shape than SoundHound, and that may leave investors wondering about SoundHound's long-term competitiveness.
SoundHound AI by the numbers Indeed, its financial condition gives investors reason for both optimism and worry. It posted massive growth in the first half of 2026, with its revenue of $106 million up 48% from the year-ago period. Unfortunately, SoundHound lost $68 million in that same timeframe, and its free cash flow of negative $61 million in the first six months of 2026 confirms its continued dependence on outside funding.
Since it holds about $203 million in liquidity, it can absorb losses for a few more quarters. Nonetheless, it has increased its share count by 122% since a SPAC took SoundHound AI public in April 2022. These actions dilute shareholder value, making it more difficult to profit from the tech stock.
Today's Change
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Current Price
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Investors are also down slightly since the SPAC purchase. Although the stock has risen significantly in the past, it seems to give back its gains fairly quickly.
Additionally, its valuation may not be low enough to entice investors. Amid ongoing losses, it does not have a P/E ratio, though its price-to-sales (P/S) ratio is 15. While that is far above the S&P 500 average of 3.8, its sales multiple is not unusually high for a fast-growing tech stock in a relatively new industry.
Still, considering its heavyweight competitors and ongoing losses, it is unclear whether investors will willingly pay that price in the long term.
Stay on the sidelines Given its current condition, investors may be best off staying on the sidelines.
Admittedly, SoundHound AI's offerings continue to gain traction with key customers, and its revenue grows rapidly as a result. However, if an industry heavyweight like Alphabet decides to compete more aggressively with SoundHound, one has to wonder whether SoundHound could respond given its financial condition. Moreover, with the continuing losses, SoundHound may further have to dilute its shares, making it more difficult for investors to earn positive returns.
Given those uncertainties, investors with the risk tolerance to buy this stock should probably hold out for a lower valuation before taking a chance on SoundHound.
Urges Stockholders to Vote Ahead of Special Meeting on September 2
, /PRNewswire/ -- LivePerson (NASDAQ: LPSN) ("LivePerson" or "the Company"), a leading provider of predictable conversational AI, today announced that the LivePerson Board of Directors has issued a formal letter reminding stockholders of the new deadline to cast their vote "FOR" the proposed transaction with SoundHound AI, Inc. (NASDAQ: SOUN).
Stockholders who have not already submitted their vote are encouraged to do so ahead of the new Special Meeting date on September 2, 2026.
The letter, the full text of which is below, has been filed with the U.S. Securities and Exchange Commission and is available at www.VoteLivePerson.com, along with additional information on how to vote.
LIVEPERSON STOCKHOLDERS: THERE IS STILL TIME TO VOTE!
SPECIAL MEETING DEADLINE EXTENDED TO SEPTEMBER 2, 2026
Dear Fellow Stockholder,
The Special Meeting of Stockholders of LivePerson, Inc. has been adjourned to Wednesday, September 2, 2026, at 10:00 a.m. ET – which means, there is still time for all stockholders to cast their votes.
The new deadline to submit your vote online or by telephone is Tuesday, September 1, 2026, at 11:59 p.m. ET. If you have already submitted your proxy, your vote remains valid and there is nothing further you need to do.
So far, over 97% of votes cast to date have been in favor of the transaction (based on preliminary results). However, the transaction can only be completed once a majority of all outstanding shares have been voted – a threshold we are currently only a few percentage points away from reaching.
We urge stockholders to submit their votes as soon as possible in order to realize the benefits of the transaction and protect the value of their investment.
Every single share counts, and your participation is crucial. By voting "FOR" the transaction with SoundHound AI, you will receive shares of SoundHound stock valued at approximately $3.33 per share of LivePerson common stock as of the April 21, 2026 announcement, an approximate 22% premium over the 30-day volume-weighted average price before the announcement. Choosing not to vote puts your entire investment at severe risk. If stockholders fail to approve the transaction, the merger will not close and LivePerson will be forced to continue operating as a standalone company. LivePerson faces numerous risks to its business – any of which could eventually lead to a reorganization or restructuring in which stockholders would in all likelihood receive no value for their shares. A Share Not Voted is the Same as a Vote "AGAINST"
Because this transaction requires approval from a majority of all outstanding shares (not just those voted), failing to vote has the exact same effect as voting "AGAINST" the merger.
Please take just two minutes to vote FOR the transaction today:
Online: www.proxyvote.com, or scan the QR code on your proxy card. Phone: Call 1-800-690-6903 with your proxy card, or 1-800-322-2885 to speak with a proxy specialist if you do not have your card. Mail: Mark, sign, and date your proxy card and return it in the postage-paid envelope. Votes must be received by 11:59 p.m. Eastern Time on September 1, 2026, or you may attend the meeting via the Internet and vote during the meeting if your shares are held directly in your name as stockholder of record at www.virtualshareholdermeeting.com/LPSN2026SM. Even if you plan to attend the Special Meeting, we recommend that you vote your shares today so that your vote will be counted if you later decide not to attend the Special Meeting.
If you hold your shares through a bank or broker, please follow the voting instructions they provide. If you hold shares through the Tel Aviv Stock Exchange, please follow the separate instructions in the proxy statement.
If you have any questions, please contact our proxy solicitor, MacKenzie Partners, Inc., toll-free at 1-800-322-2885 or by email at [email protected].
Thank you for your prompt attention and continued support.
Sincerely,
The Board of Directors
LivePerson, Inc.
VOTE TODAY
Stockholders of record as of the close of business on July 6, 2026, are entitled to vote at the Special Meeting. If you have already submitted your proxy, your vote remains valid and there is nothing further you need to do.
Vote today by proxy card, online or by phone. For more information and additional materials visit VoteLivePerson.com, or contact LivePerson's proxy solicitor, MacKenzie Partners, Inc., toll-free at (800) 322-2885 or by e-mail at [email protected].
MacKenzie Partners, Inc.
7 Penn Plaza
New York, NY 10001
Call Toll-Free: (800) 322-2885
Email: [email protected]
Tel Aviv Stock Exchange Voting Information
LivePerson stockholders who hold shares listed on the Tel Aviv Stock Exchange (TASE) and intend to vote their shares must deliver to LivePerson's Israeli counsel, Arnon, Tadmor-Levy, c/o Moshe Pasker, Azrieli Center (Square Tower), Tel Aviv, Israel, 6702101 (email: [email protected]), an ownership certificate confirming their ownership on July 6, 2026. The form of proxy card for stockholders who hold shares listed on the TASE can be found here: https://mayafiles.tase.co.il/rpdf/1759001-1760000/P1759388-00.pdf.
Stockholders may alternatively vote via the Israeli Securities Authority's Electronic Voting System (https://votes.isa.gov.il) up to six (6) hours before the time set for the Meeting. Stockholders should contact the TASE member (bank, broker, custodian) through which they hold their TASE shares to receive the necessary personal identifying number and access code to vote through the Electronic Voting System.
About LivePerson
LivePerson (NASDAQ: LPSN) is an enterprise leader in predictable conversational AI. The world's leading brands use our award-winning Conversational Cloud and Syntrix platforms to connect with millions of customers. We power nearly a billion messages every month, providing uniquely rich data analytics, agent training, and AI evaluation tools to unlock the power of conversational AI for better business outcomes. Learn more at liveperson.com.
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Forward-Looking Statements
This document contains "forward-looking statements" within the meaning of the U.S. federal securities laws about the expectations, beliefs, plans, intentions, prospects, financial results and strategies relating to SoundHound AI's proposed acquisition of LivePerson. Such forward-looking statements include, among others, statements regarding the timing of filing the definitive proxy/prospectus and timing of LivePerson's special meeting, obtaining regulatory approvals, the timing of closing of the proposed acquisition, and the parties' expectations, intentions, strategies, assumptions or beliefs about future events, results of operations or performance or that do not solely relate to historical or current facts. Forward-looking statements are predictions, projections and other statements about future events or conditions that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication, including: (1) the occurrence of any event, change, or other circumstance that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between LivePerson and SoundHound; (2) the possibility that the transaction does not close when expected or at all due to the failure to satisfy all of the conditions to closing on a timely basis or at all, including the failure to obtain the required shareholder approvals or to consummate the notes restructuring transactions contemplated by the Notes Restructuring Agreement; (3) the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in, or problems arising from, general economic and market conditions, interest and exchange rates, monetary policy, trade policy (including tariff levels), laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which LivePerson and SoundHound operate; (4) any failure to promptly and effectively integrate the businesses of LivePerson and SoundHound; (5) the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (6) reputational risk and potential adverse reactions of LivePerson's or SoundHound's customers, employees or other business partners, including those resulting from the announcement, pendency or completion of the transaction; (7) the diversion of management's attention and time to the transaction from ongoing business operations and opportunities; and (8) the outcome of any legal proceedings that may be instituted against LivePerson or SoundHound or in connection with the transaction. Further information on factors that could affect the forward-looking statements and expectations above are contained in the filings that LivePerson and/or SoundHound AI have filed, or that will be filed, with the U.S. Securities and Exchange Commission (the "SEC"), including as set forth in the Form S-4 and the proxy statement/prospectus contained therein, as well as the documents incorporated by reference therein.
All forward-looking statements are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made, and LivePerson does not undertake or assume any obligation to update publicly any of these statements to reflect actual results, new information or future events, changes in assumptions, or changes in other factors affecting forward-looking statements, except to the extent required by applicable law.
No Offer or Solicitation
This communication is not intended to be, and shall not constitute, an offer to sell, buy or exchange or the solicitation of an offer to sell, buy or exchange any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Additional Information and Where to Find It
In connection with the proposed transaction, SoundHound AI has filed with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on Form S-4 (the "Form S-4") that includes a definitive proxy statement of LivePerson and that constitutes a prospectus of SoundHound AI with respect to the shares of the SoundHound AI common stock to be issued in the proposed transaction, dated July 9, 2026 (the "proxy statement/prospectus"). The proxy statement/prospectus was filed with the SEC on July 9, 2026 by LivePerson, and the mailing of the proxy statement/prospectus began to LivePerson's stockholders on or about the same date. Each of SoundHound AI and LivePerson may also file other relevant documents with the SEC regarding the proposed transaction.
This communication is not a substitute for the Form S-4, the proxy statement/prospectus or any other document that SoundHound AI or LivePerson has filed, or may file, with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF SOUNDHOUND AI AND LIVEPERSON ARE URGED TO READ THE FORM S-4, THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain copies of these documents (if and when available), as well as other filings containing information about SoundHound AI and LivePerson, free of charge on the SEC's website at www.sec.gov. Copies of the documents filed with, or furnished to, the SEC by the Company will be available free of charge on SoundHound AI's website at https://investors.soundhound.com/financial-information/sec-filings. Copies of the documents filed with, or furnished to, the SEC by LivePerson will be available free of charge on LivePerson's website at https://ir.liveperson.com/financial-information/sec-filings. The information included on, or accessible through, SoundHound AI's or LivePerson's website is not incorporated by reference into this communication.
Participants in the Solicitation
SoundHound, LivePerson and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies with respect to the proposed transaction under the rules of the SEC. Information about the directors and executive officers of SoundHound, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in SoundHound's definitive proxy statement for its 2026 annual meeting of stockholders under the heading "Proposal 1 – Election of Directors", which was filed with the SEC on April 9, 2026 and is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/0001840856/000121390026041978/ea0285618-01.htm. Information about the directors and executive officers of LivePerson and their ownership of LivePerson equity interests can be found in the section entitled "Interests of LivePerson Directors and Executive Officers in the Mergers" and "Owners and Management of LivePerson" included in the proxy/prospectus, which was filed with the SEC on July 9, 2026 and is available at https://www.sec.gov/Archives/edgar/data/1102993/000121390026076759/ea0297465-01.htm. Further information about the directors and executive officers of LivePerson may be found in its amendment to its Annual Report on Form 10-K for the year ended December 31, 2025 under the headings "Directors, Executive Officers and Corporate Governance," "Executive Compensation," "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" and is available at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001102993/000110299326000020/lpsn-20251231.htm; in the Form 3 and Form 4 statements of beneficial ownership and statements of changes in beneficial ownership filed with the SEC by LivePerson's directors and executive officers; and is in other documents filed by LivePerson with the SEC. Additional information regarding the interests of the participants in the solicitation of proxies will be included in other relevant materials to be filed with the SEC if and when they become available. You should read the Form S-4 and the proxy statement/prospectus carefully before making any voting or investment decisions. You may obtain free copies of these documents using the sources indicated above.
SoundHound AI is rapidly expanding its voice-enabled artificial intelligence footprint through aggressive acquisitions and strategic partnerships in the restaurant and automotive sectors. Taiwan Semiconductor Manufacturing continues to dominate the global foundry market, producing nearly all the world's most advanced processors for high-performance computing.
Adoption grows for SOUN's proprietary OASYS, Voice AI SaaS platform, as observed in the twice raised FY2026 guidance and improving operating leverage. LivePerson acquisition is expected to be accretive, positioning SOUN for further cross-selling opportunities to the larger enterprise clients. The double digits top-line growth prospects imply SOUN's deeply discounted EV/Sales of 13.11x, as the management hints at further growth opportunities.
U.S. stock markets have been witnessing an astonishing bull run supported by artificial intelligence (AI) trade. For the past three and a half years, AI trade has single-handedly driven Wall Street.
Despite these positives, several AI-driven mid-cap stocks have provided double-digit negative returns this year. Here, we have identified two such stocks with a favorable Zacks Rank that have significantly lagged in 2026. However, these stocks have room for growth in the near future.
These stocks are: SoundHound AI Inc. (SOUN - Free Report) and Workiva Inc. (WK - Free Report) . Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our two picks year to date.
Image Source: Zacks Investment Research
SoundHound AI Inc.Zacks Rank #2 SoundHound has seen record-high revenue growth in the last reported quarter driven by accelerating enterprise adoption of its OASYS agentic AI platform. SOUN’s expanding enterprise customer base, leadership in voice and agentic AI and debt-free balance sheet support its long-term growth outlook.
SOUN is benefiting from rising enterprise adoption of conversational and agentic AI as businesses increasingly automate customer interactions across voice, chat and digital channels. SOUN has expanded beyond its traditional automotive business into restaurants, retail, healthcare, financial services, telecommunications, energy and other enterprise verticals, creating multiple long-term growth avenues.
SOUN has built one of the industry's most differentiated independent voice AI platforms over nearly two decades of research and development. Its proprietary Speech-to-Meaning and Deep Meaning Understanding technologies enable faster, more accurate conversational AI than traditional speech-to-text architectures. Its technology is now backed by more than 400 patents, while OASYS combines capabilities from SoundHound and acquired businesses into a unified platform for conversational and agentic AI.
Strong Estimate RevisionsSoundHound AI has an expected revenue and earnings growth rate of 41% and -23.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.1% over the last 30 days.
SOUN has an expected revenue and earnings growth rate of 14.6% and 14.7%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 23.5% over the last 30 days.
Huge Price Upside PotentialThe short-term average price target of brokerage firms represents an increase of 71.4% from the last closing price of $6.99. The brokerage target price is currently in the range of $7-$16. This indicates a maximum upside of 128.6% and no downside.
Workiva Inc.Zacks Rank #1 Workiva offers a cloud-based and mobile-enabled platform for enterprises to collect, manage, report and analyze critical business data in real time. WK provides solutions for compliance, risk, sustainability and management reporting as well as enterprise risk management.
WK incorporates purpose-built AI agents and data intelligence layers, into its enterprise reporting. WK serves the manufacturing and materials, energy and utilities, financial services, healthcare, media and entertainment, real estate, retail, consumer goods, services, transportation and technology and telecom industries.
Strong Estimate RevisionsWorkiva has an expected revenue and earnings growth rate of 17.8% and 85.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 13.4% over the last 30 days.
WK has an expected revenue and earnings growth rate of 15.1% and 21.9%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 17.2% over the last 30 days.
Solid Price Upside PotentialThe short-term average price target of brokerage firms represents an increase of 10% from the last closing price of $70.10. The brokerage target price is currently in the range of $65-$91. This indicates a maximum upside of 29.8% and a downside of 7.3%.
SoundHound is a compelling AI voice software play with strong growth and underappreciated AI tailwinds, warranting a reiterated Buy rating. SOUN's expanding verticals, OASYS agentic AI launch, pending LivePerson acquisition, and clean $200M+ cash balance support its growth and profitability trajectory. Q2 revenue surged 45% y/y to $61.9M, with notable 7- and 8-figure enterprise deals and sequential gross margin improvement to 58.4%.
Voting Closes Tomorrow, Wednesday, August 19, 2026, at 11:59 p.m. ET
Failing to Vote Has the Exact Same Effect as Voting "AGAINST" the Merger
, /PRNewswire/ -- LivePerson (NASDAQ: LPSN) ("LivePerson" or "the Company"), a leading provider of predictable conversational AI, today reminds all stockholders to vote "FOR" the Company's proposed transaction with SoundHound AI, Inc. (NASDAQ: SOUN).
Please vote today by proxy card, online or by phone. More information at VoteLivePerson.com
The Special Meeting of Stockholders will take place this Thursday, August 20, 2026, at 10:00 a.m. Eastern Time. However, to ensure your shares are represented, you must submit your proxy vote by 11:59 p.m. Eastern Time TOMORROW, Wednesday, August 19, 2026. (TASE stockholders: Completed proxy cards and ownership certificates must be delivered to Israeli counsel by 7:00 p.m. Israel time tomorrow, Wednesday, August 19).
Why You Must Act Immediately:
A Share Not Voted is a Vote "AGAINST": Because transaction approval requires the affirmative vote of a majority of all outstanding shares (not just those cast), if you do not vote, it has the exact same effect as voting "AGAINST" the transaction. Inaction will block the merger and put your investment at risk. ISS and Glass Lewis Unanimously Recommend "FOR" vote: Both leading independent proxy advisory firms have strongly endorsed this transaction as a viable path to maximize stockholder value and avoid standalone insolvency risks. Critical Standalone Risks: If the transaction fails, stockholders are exposed to the risks of continued slowing or degradation of LivePerson's business given commercial headwinds from the Company's standalone financial profile, a potential delisting from the Nasdaq, and potential inability to service or repay LivePerson's substantial debt and/or comply with debt-related financial covenants, which could eventually lead to reorganization, in which stockholders would in all likelihood receive no value for their shares. Noteholder Concessions Deliver Premium Value: LivePerson's outstanding debt currently exceeds the total value of the transaction. As part of the transaction, our secured noteholders have agreed to exchange their notes at a value reflecting a substantial discount to the notes' approximately $350 million par value. As a result of these concessions, most LivePerson stockholders will receive shares of SoundHound stock valued at approximately $3.33 per share as of the April 21, 2026, announcement, representing an attractive 22% premium over our 30-day volume-weighted average trading price before such announcement. Stockholders holding shares on the Tel Aviv Stock Exchange will receive a substantially equivalent value in cash. VOTE TODAY
Vote today by proxy card, online or by phone. For more information and additional materials visit VoteLivePerson.com, or contact LivePerson's proxy solicitor, MacKenzie Partners, Inc., toll-free at (800) 322-2885 or by e-mail at [email protected].
LivePerson stockholders who hold shares listed on the Tel Aviv Stock Exchange (TASE) and intend to vote their shares must deliver to LivePerson's Israeli counsel, Arnon, Tadmor-Levy, c/o Moshe Pasker, Azrieli Center (Square Tower), Tel Aviv, Israel, 6702101 (email: [email protected]), an ownership certificate confirming their ownership on July 6, 2026. The form of proxy card for stockholders who hold shares listed on the TASE can be found here: https://mayafiles.tase.co.il/rpdf/1759001-1760000/P1759388-00.pdf.
About LivePerson
LivePerson (NASDAQ: LPSN) is an enterprise leader in predictable conversational AI. The world's leading brands use our award-winning Conversational Cloud and Syntrix platforms to connect with millions of customers. We power nearly a billion messages every month, providing uniquely rich data analytics, agent training, and AI evaluation tools to unlock the power of conversational AI for better business outcomes. Learn more at liveperson.com.
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Forward-Looking Statements
This document contains "forward-looking statements" within the meaning of the U.S. federal securities laws about the expectations, beliefs, plans, intentions, prospects, financial results and strategies relating to SoundHound AI's proposed acquisition of LivePerson. Such forward-looking statements include, among others, statements regarding the timing of filing the definitive proxy/prospectus and timing of LivePerson's special meeting, obtaining regulatory approvals, the timing of closing of the proposed acquisition, and the parties' expectations, intentions, strategies, assumptions or beliefs about future events, results of operations or performance or that do not solely relate to historical or current facts. Forward-looking statements are predictions, projections and other statements about future events or conditions that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication, including: (1) the occurrence of any event, change, or other circumstance that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between LivePerson and SoundHound; (2) the possibility that the transaction does not close when expected or at all due to the failure to satisfy all of the conditions to closing on a timely basis or at all, including the failure to obtain the required shareholder approvals or to consummate the notes restructuring transactions contemplated by the Notes Restructuring Agreement; (3) the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in, or problems arising from, general economic and market conditions, interest and exchange rates, monetary policy, trade policy (including tariff levels), laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which LivePerson and SoundHound operate; (4) any failure to promptly and effectively integrate the businesses of LivePerson and SoundHound; (5) the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (6) reputational risk and potential adverse reactions of LivePerson's or SoundHound's customers, employees or other business partners, including those resulting from the announcement, pendency or completion of the transaction; (7) the diversion of management's attention and time to the transaction from ongoing business operations and opportunities; and (8) the outcome of any legal proceedings that may be instituted against LivePerson or SoundHound or in connection with the transaction. Further information on factors that could affect the forward-looking statements and expectations above are contained in the filings that LivePerson and/or SoundHound AI have filed, or that will be filed, with the U.S. Securities and Exchange Commission (the "SEC"), including as set forth in the Form S-4 and the proxy statement/prospectus contained therein, as well as the documents incorporated by reference therein.
All forward-looking statements are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made, and LivePerson does not undertake or assume any obligation to update publicly any of these statements to reflect actual results, new information or future events, changes in assumptions, or changes in other factors affecting forward-looking statements, except to the extent required by applicable law.
No Offer or Solicitation
This communication is not intended to be, and shall not constitute, an offer to sell, buy or exchange or the solicitation of an offer to sell, buy or exchange any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Additional Information and Where to Find It
In connection with the proposed transaction, SoundHound AI has filed with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on Form S-4 (the "Form S-4") that includes a definitive proxy statement of LivePerson and that constitutes a prospectus of SoundHound AI with respect to the shares of the SoundHound AI common stock to be issued in the proposed transaction, dated July 9, 2026 (the "proxy statement/prospectus"). The proxy statement/prospectus was filed with the SEC on July 9, 2026 by LivePerson, and the mailing of the proxy statement/prospectus began to LivePerson's stockholders on or about the same date. Each of SoundHound AI and LivePerson may also file other relevant documents with the SEC regarding the proposed transaction.
This communication is not a substitute for the Form S-4, the proxy statement/prospectus or any other document that SoundHound AI or LivePerson has filed, or may file, with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF SOUNDHOUND AI AND LIVEPERSON ARE URGED TO READ THE FORM S-4, THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain copies of these documents (if and when available), as well as other filings containing information about SoundHound AI and LivePerson, free of charge on the SEC's website at www.sec.gov. Copies of the documents filed with, or furnished to, the SEC by the Company will be available free of charge on SoundHound AI's website at https://investors.soundhound.com/financial-information/sec-filings. Copies of the documents filed with, or furnished to, the SEC by LivePerson will be available free of charge on LivePerson's website at https://ir.liveperson.com/financial-information/sec-filings. The information included on, or accessible through, SoundHound AI's or LivePerson's website is not incorporated by reference into this communication.
Participants in the Solicitation
SoundHound, LivePerson and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies with respect to the proposed transaction under the rules of the SEC. Information about the directors and executive officers of SoundHound, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in SoundHound's definitive proxy statement for its 2026 annual meeting of stockholders under the heading "Proposal 1 – Election of Directors", which was filed with the SEC on April 9, 2026 and is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/0001840856/000121390026041978/ea0285618-01.htm. Information about the directors and executive officers of LivePerson and their ownership of LivePerson equity interests can be found in the section entitled "Interests of LivePerson Directors and Executive Officers in the Mergers" and "Owners and Management of LivePerson" included in the proxy/prospectus, which was filed with the SEC on July 9, 2026 and is available at https://www.sec.gov/Archives/edgar/data/1102993/000121390026076759/ea0297465-01.htm. Further information about the directors and executive officers of LivePerson may be found in its amendment to its Annual Report on Form 10-K for the year ended December 31, 2025 under the headings "Directors, Executive Officers and Corporate Governance," "Executive Compensation," "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" and is available at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001102993/000110299326000020/lpsn-20251231.htm; in the Form 3 and Form 4 statements of beneficial ownership and statements of changes in beneficial ownership filed with the SEC by LivePerson's directors and executive officers; and is in other documents filed by LivePerson with the SEC. Additional information regarding the interests of the participants in the solicitation of proxies will be included in other relevant materials to be filed with the SEC if and when they become available. You should read the Form S-4 and the proxy statement/prospectus carefully before making any voting or investment decisions. You may obtain free copies of these documents using the sources indicated above.
Key Takeaways SoundHound posted record Q2 revenues of $61.9M, up 45%, while non-GAAP net loss narrowed 24%.OASYS sped pilot-to-deployment conversions, including an eight-figure commitment in under 90 days.SoundHound had $203M in cash, no debt and raised 2026 revenue guidance to $230M-$260M. SoundHound AI, Inc. (SOUN - Free Report) showed progress toward profitable growth in second-quarter 2026 as strong revenue gains were accompanied by improving margins and narrower losses. Revenues jumped 45% year over year to a record $61.9 million, while non-GAAP net loss narrowed 24% to $9 million from $11.9 million. Non-GAAP loss per share improved to 2 cents from 3 cents.
The improvement reflects both operating momentum and cost discipline. Adjusted EBITDA loss narrowed 33% year over year to $9.6 million. GAAP gross margin expanded 610 basis points to 45.1%, although non-GAAP gross margin remained unchanged at 58.4%.
OASYS is central to SoundHound’s path toward scale. The agentic AI platform is helping convert pilots into large implementations faster, including an eight-figure commitment signed less than 90 days after the initial demo. Management continued investing in growth while maintaining spending discipline.
SoundHound is also moving more workloads onto its proprietary technology. Its SMB customers are now entirely on the company’s own model stack. Management expects its Polaris speech model, specialized LLMs and speech synthesis technology to improve quality while lowering costs and supporting higher margins over time.
Still, profitability has not arrived. SoundHound used nearly $60 million in operating cash during the first half of 2026, up from $43.7 million a year earlier. Yet, with $203 million in cash, no debt and 2026 revenue guidance raised to $230-$260 million, stronger scale and cost efficiencies provide a clearer path toward profitable growth.
SoundHound Faces Profitable AI RivalsSoundHound competes with Five9 (FIVN - Free Report) and NICE (NICE - Free Report) in conversational AI, customer engagement and AI-powered contact-center automation. Both provide important profitability benchmarks as SoundHound works to turn rapid revenue growth into sustainable earnings.
Five9’s second-quarter 2026 revenues increased 10% year over year to $312.4 million, while adjusted EBITDA reached $70.1 million, representing a 22.4% margin. Five9 generated $42.1 million in operating cash flow and posted non-GAAP net income of $53.5 million. Subscription revenues grew 14%, while management noted that AI revenues accelerated even faster.
NICE generated second-quarter 2026 revenues of $782.3 million, up 7.6%, while cloud revenues advanced 12.6% to $609 million. NICE delivered non-GAAP operating income of $198 million, a 25.3% margin, and $122.7 million in operating cash flow. Its AI and self-service ARR surged 52% to $362 million.
Against these profitable rivals, SoundHound’s narrowing $9.6 million adjusted EBITDA loss shows progress, but Five9 and NICE demonstrate the profitability and cash generation SoundHound still needs to achieve as OASYS scales.
SOUN’s Price Performance, Valuation & EstimatesSoundHound’s shares have lost 25.4% year to date (YTD), underperforming the industry, as shown below.
SOUN’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, SOUN trades at a forward price-to-sales (P/S) multiple of 12.7, slightly above the industry’s average.
SOUN’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Over the past 30 days, the Zacks Consensus Estimate for SoundHound’s 2026 and 2027 loss per share has narrowed to 16 cents and 13 cents, respectively, as shown below. The expected loss for 2026 remains wider than the previous year’s loss of 13 cents per share.
Image Source: Zacks Investment Research
SOUN currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AppLovin: Steady Top-Line Expansion Over the Past YearAppLovin (APP +0.89%) primarily generates revenue by offering a structured software ecosystem that directly assists mobile application developers in their efforts to market, monetize, and analytically track their various digital application offerings.
While officially opening its core advertising network to general self-serve access for external e-commerce brands and navigating internal executive leadership transitions, it reported a net income margin of 66% for the quarter ended June 30, 2026.
SoundHound AI: Rapid Top-Line Growth From a Much Smaller BaseSoundHound AI (SOUN -0.67%) mainly earns revenue by delivering customized voice technology tools that allow a variety of corporate clients to integrate conversational assistants into their daily consumer-facing software applications and physical devices.
It advanced a pending corporate acquisition agreement with LivePerson alongside publicly securing new commercial service contracts, and it reported a net income margin of negative 69% for the quarter ended June 30, 2026.
Why Revenue Trajectories Matter for InvestorsRevenue represents the total amount of money brought in by a company's business operations, which serves as a crucial baseline indicator of overall commercial demand, customer acquisition success, and fundamental long-term viability.
Quarter (Period End)AppLovin RevenueSoundHound AI RevenueQ3 2024 (Sept. 2024)$835.2 million$25.1 millionQ4 2024 (Dec. 2024)$1.4 billion$34.5 millionQ1 2025 (March 2025)$1.2 billion$29.1 millionQ2 2025 (June 2025)$1.3 billion$42.7 millionQ3 2025 (Sept. 2025)$1.4 billion$42.0 millionQ4 2025 (Dec. 2025)$1.7 billion$55.1 millionQ1 2026 (March 2026)$1.8 billion$44.2 millionQ2 2026 (June 2026)$1.9 billion$61.9 millionData source: Company filings. Data as of Aug. 12, 2026.
Foolish TakeA revenue comparison between AppLovin and SoundHound AI illustrates the differences between the former's focus on the digital advertising industry and the latter's niche of automated voice assistants powered by artificial intelligence. AppLovin commands far higher sales, given its larger market. Over the last six quarters, it's also demonstrated consistent quarter-over-quarter revenue growth, a testament to the strength of its offerings.
Despite this, AppLovin shares dropped to a 52-week low of $303.17 on Aug. 12. Wall Street analysts downgraded the stock because its second-quarter revenue of $1.9 billion missed expectations.
SoundHound experiences a more typical pattern of year-over-year sales increases, although some of that growth comes from acquisitions. Its April announcement that the company is acquiring LivePerson points to continued revenue expansion.
In fact, SoundHound estimates its 2027 sales will reach between $350 million and $400 million with the acquisition of LivePerson. It forecasted 2026 revenue to be in the range of $230 million to $260 million, an increase from its previous full-year guidance thanks to its second-quarter sales of $61.9 million, which represents strong 45% year-over-year growth.
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SoundHound AI (NASDAQ:SOUN) currently trades at $7.48, while the average Wall Street price target sits at $12.71, an implied gap of 69.92% between current price and analyst consensus.
SoundHound builds independent voice and agentic AI software deployed across automotive, healthcare, restaurants, and financial services. Wall Street is watching because the top line compounds fast while losses narrow, and the pending LivePerson acquisition could reshape the revenue base heading into 2027.
One prominent analyst carries the Street-high target of $20, implying roughly 167% upside from here.
A Rerating That Erased Half The Stock In A Year
SoundHound has lost 54.67% over the past year. Shares traded as high as $22.17 in the last 52 weeks before drifting toward single digits.
The selloff came despite strong results. Q2 FY2026 revenue of $61.9 million came in 45.02% ahead of the prior year and beat the $52.4 million consensus. Investors punished the story for cash burn and dilution risk: cash slipped from $248.5M to $202.8M over six months, stock-based comp ran at $21.5M in the quarter, and contingent acquisition liabilities of $83.6M loom over the share count.
The pain was company-specific. The S&P 500 rose 20.62% over the same 12-month window while SOUN lost more than half its value.
Why The Sell-Side Still Sees A Path Back Above $12
Analysts have refused to blink because the operating story keeps beating models. Of the analysts tracked, six rate SOUN a Buy and two rate it Hold, with no Sell ratings. Full-year 2026 revenue guidance was raised to $230 million to $260 million, and combined 2027 revenue with LivePerson is projected at $350 million to $400 million minimum.
H.C. Wainwright’s bull case sits at the top of the range. The firm highlights rapid drive-thru monetization at Church’s Texas Chicken, Torchy’s Tacos, and White Castle, expansion into Vision AI and the Agentic+ platform, and cross-selling voice into the Amelia and LivePerson customer bases. Operational leverage is expected to push SoundHound toward adjusted EBITDA break-even by late 2026 or 2027, backed by a debt-free balance sheet.
CEO Keyvan Mohajer told investors that “our pipeline has never been this big, and our win rate has never been this good,” citing an eight-figure commitment signed in less than 90 days from demo to contract. With Gartner projecting agentic AI software spending near $1 trillion by 2030, the analyst view is that SoundHound is early in a category it helped define. Recent revisions have leaned reiteration and upgrade, not downgrade.
SoundHound Fell Alone Among Its Direct Peers
The broader enterprise and voice AI cohort is soft, but SOUN’s 12-month drop is the steepest of the closest comparables.
Cerence (NASDAQ:CRNC), the closest voice-in-vehicle competitor, trades at $8.61 against a consensus target of $10.75, roughly 25% upside. It has fallen 36.32% over the past year. The rating slate skews Hold at one Buy and four Holds.
C3.ai (NYSE:AI | AI Price Prediction) sits at $10.18 with a consensus target of $8.82, meaning analysts collectively see downside from here. Shares are off 45.27% over 12 months, and the rating mix is bearish at one Buy, seven Holds, three Sells, and three Strong Sells following downgrades tied to restructuring under returning CEO Tom Siebel.
BigBear.ai (NYSE:BBAI) trades at $3.34 with a consensus target of $4.00, about 20% upside. The stock is down 42.51% on the year, with one Buy and two Holds and no meaningful upgrade momentum.
The largest analyst-implied upside across the group belongs to SoundHound at 69.92% on consensus, and 167% on the Street-high case.
Consensus Says 70% Upside, The Street-High Says 167%
SOUN trades at $7.48 with an average analyst target of $12.71, implying 69.92% upside. Coverage is concentrated among eight analysts, with six Buy ratings and two Hold, and no Sells.
Year to date, SOUN is off 24.97%, while the S&P 500 is up 14.07%. Recent trading has been firmer, with the stock up 11.81% over the past month following the Q2 report. Reddit sentiment around the earnings release ran very bullish at 82, and insider activity is net buying with 17 recent transactions.
Opportunity Or Value Trap
The bull case strengthens if the LivePerson deal closes cleanly and combined 2027 revenue arrives at the $350 million to $400 million range with gross margin marching back toward the 70% level the CFO explicitly targets. The path to consensus $12.71 runs through EBITDA break-even, continued 40%-plus revenue growth, and OASIS wins that convert eight-figure demos into signed contracts. Scott Buck’s $20 target stops looking like a stretch if that happens.
The bear case takes hold if cash burn chews through the $202.8 million war chest faster than losses narrow, if $21.5 million quarterly stock comp turns growth into permanent dilution, or if LivePerson integration surfaces execution risk. A high beta of 2.83 means the round trip could hurt.
The peer group offers less upside on worse fundamentals, the consensus gap is real, and the operating trajectory is trending the right way. This is a high-volatility bet on execution rather than a safe compounder, and position sizing matters more than conviction here.
Contact [email protected] for any questions or corrections.
Key Takeaways SOUN posted record Q2 revenues of $61.9M, up 45%, while margins and adjusted EBITDA loss improved.OASYS drove strong Q2 results, with one eight-figure commitment signed less than 90 days after its demo.SOUN raised its 2026 revenue outlook to $230-$260M as growth broadened across multiple markets. SoundHound AI, Inc. (SOUN - Free Report) has given Wall Street fresh reasons to become more positive after a record second quarter, highlighted by faster revenue growth, improving margins and strong adoption of its OASYS platform. The better-than-expected performance has led to upward estimate revisions, strengthening the investment case even as the stock remains sharply down in 2026. Over the past 30 days, the Zacks Consensus Estimate for SoundHound’s 2026 loss has narrowed to 14 cents per share from 15 cents, while the estimated 2027 loss has narrowed to 15 cents from 17 cents. The consensus estimate calls for 2026 revenues to rise 41% from the 2025 level, followed by another 14.6% increase in 2027. However, the expected 2026 loss remains wider than the loss of 13 cents per share reported in the previous year.
SOUN Estimate Revision
Image Source: Zacks Investment Research
The bullish brokerage view is also notable. Of the eight recommendations making up the current Average Brokerage Recommendation, five are Strong Buy, accounting for 62.5% of the total. The average Wall Street price target implies 62.2% upside from the latest closing price.
Image Source: Zacks Investment Research
Record Q2 Gives Analysts More ConfidenceSoundHound delivered second-quarter revenues of $61.9 million, up 45% year over year and 40% sequentially. The quarter marked the company's highest revenue to date. Non-GAAP loss was 2 cents per share compared with 3 cents a year earlier. GAAP gross margin expanded to 45.1% from 39%, while adjusted EBITDA loss improved 33% to $9.6 million from $14.3 million.
The quarter's strength was broad-based rather than dependent on one market. Management said growth came from healthcare, financial services, technology and automotive, while enterprise AI remained the largest contributor to revenues. SoundHound also continued to expand its automotive presence in Asia.
Strong second-quarter execution prompted management to raise its 2026 revenue outlook to $230-$260 million. The guidance does not yet incorporate the planned LivePerson acquisition, and SoundHound intends to update its outlook when that transaction closes.
OASYS Emerges as a Major Growth CatalystOASYS is becoming central to SoundHound's growth story. Management attributed a significant part of the second quarter's stronger-than-expected performance to the self-learning agentic AI platform, which was launched in May. The company said it is seeing strong results across demos, RFPs, pilots and production deployments. One eight-figure commitment moved from initial demonstration to contract signing in less than 90 days, highlighting the potential for OASYS to shorten sales cycles.
The platform also gives SoundHound a way to expand within existing customers. OASYS allows businesses to deploy AI agents across phones, vehicles, restaurants, retail locations and other channels rather than building separate solutions for each channel. A top-20 healthcare provider quadrupled its spending with SoundHound during the second quarter, while the company expanded or renewed relationships with several other healthcare and financial-services customers.
SoundHound's proprietary technology could support margins over time as well. The company is investing in its Polaris speech foundation model, specialized LLMs and speech synthesis. Its smaller-business customers are already operating entirely on SoundHound's own stack, and management believes greater use of proprietary models can reduce costs while improving accuracy, latency and control.
Expanding Markets Add to SOUN's TailwindsSoundHound is increasingly diversified beyond its traditional automotive business. During the second quarter, it added and expanded customers across healthcare, financial services, restaurants, automotive and consumer devices. Restaurant adoption was particularly encouraging, with technology expanding across Five Guys, IHOP and Jersey Mike's, while a major pizza brand had SoundHound deployed in more than 75% of its locations. The company also signed an initial eight-figure multiyear partnership covering more than 20 countries in Latin America.
Voice Commerce offers another potential growth channel. SoundHound plans to pilot direct in-vehicle transactions and is working to bring agentic transactions to connected devices. If these initiatives scale, the company could move beyond software fees and participate more directly in transaction-based opportunities.
The planned LivePerson acquisition could further expand SoundHound's enterprise footprint. Management expects the transaction to add relationships with 25 Fortune 100 companies and believes OASYS can provide a common platform for integrating acquired technologies.
Losses, Cash Burn and Valuation Remain Key RisksDespite the operating progress, SoundHound has not yet reached profitability. Second-quarter GAAP net loss was $42.8 million, while the non-GAAP net loss totaled $9 million. For the first six months of 2026, operating activities used nearly $60 million of cash, up from $43.7 million in the year-ago period. The company nevertheless ended June with about $203 million in cash and no debt, providing financial flexibility while it continues investing in growth.
The acquisition strategy adds another layer of execution risk. Integrating LivePerson while continuing to migrate customers from previously acquired businesses onto OASYS will require careful execution. Management acknowledged that legacy customers will move to OASYS at different speeds rather than through a rapid forced migration.
Valuation also leaves little room for major execution setbacks. SOUN trades at 12.34X forward 12-month sales, slightly above the Zacks Computers - IT Services industry's 12.23X. Investors are therefore paying a premium for growth despite continued losses and cash use.
SOUN’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
SOUN Still Trails the Market Despite Q2 MomentumSoundHound shares are down 25.6% year to date, underperforming the Zacks Computers - IT Services industry's 14.3% decline. The gap is much wider against the broader Zacks Computer and Technology sector, which has gained 16.9%, and the S&P 500's 12.5% advance.
SOUN’s YTD Price Performance
Image Source: Zacks Investment Research
The weak share-price performance suggests that investors remain cautious about profitability, valuation and execution. However, the combination of stronger second-quarter results, raised revenue guidance and improving earnings estimates gives the stock a stronger fundamental base than its year-to-date performance implies.
How SoundHound Measures Up Against Key AI RivalsSoundHound faces different competitors across its expanding AI markets. Cerence (CRNC - Free Report) competes directly in automotive voice AI, conversational assistants and in-car AI solutions, while Five9 (FIVN - Free Report) competes in cloud contact centers, voice bots and customer engagement automation. NICE (NICE - Free Report) also competes in enterprise conversational AI, contact center automation and AI-powered customer service.
SoundHound's 25.6% year-to-date (YTD) plunge trails Cerence's 19.1% dip and NICE's 12.8% decline, while Five9 has surged 55.6%. Valuation makes the difference even sharper. SoundHound's 12.34X forward sales multiple is far above Cerence at 1.26X, Five9 at 1.78X and NICE at 1.71X.
That premium means SoundHound must deliver much faster growth to justify its valuation. Cerence remains an important automotive benchmark, while Five9 and NICE bring established enterprise customer bases. SoundHound's advantage rests on OASYS, its proprietary voice technology and its ability to connect enterprise, automotive and physical AI experiences on one platform.
Is SOUN Stock a Buy Now?SoundHound's investment case has strengthened following the second quarter. Record revenues, accelerating OASYS adoption, improving margins, a higher 2026 revenue outlook and favorable estimate revisions all point toward better operating momentum. The expansion across healthcare, financial services, restaurants, automotive and Voice Commerce also reduces reliance on any single end market.
Risks remain meaningful. SoundHound is still losing money and burning cash, the LivePerson deal introduces integration risk, and its valuation carries a sizable premium to Cerence, Five9 and NICE. The stock's 25.6% YTD decline shows that investors continue to demand proof that rapid revenue growth can eventually translate into sustainable profits.
Still, upward estimate revisions following a strong second quarter improve the risk-reward setup. With SoundHound currently carrying a Zacks Rank #2 (Buy), investors willing to accept higher volatility and execution risk can consider the stock for its long-term exposure to conversational and agentic AI growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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SoundHound AI (NASDAQ:SOUN | SOUN Price Prediction) is a pure-play bet on enterprise voice and agentic AI, yet the stock is down 25.68% year to date.
Revenue grew 45% year over year to $61.9 million in Q2, guidance was raised to $230 million to $260 million for the full year, and CEO Keyvan Mohajer said Q2 revenue is now “10x higher than Q2 four years ago”.
Can this stock finish 2026 at $12?
Why SoundHound Shares Are Stuck Despite Accelerating Deal Flow Shares are down 53.4% over the past year, falling from a 52-week high of $22.17 to $7.39. Three factors explain it:
Cash burn: Cash slipped from $248.5 million to $202.8 million in six months. Dilution optics: Stock-based comp ran $21 million in Q2 and $83.6 million in contingent acquisition liabilities loom. Beta: At 2.83, SOUN gets punished harder on risk-off days. The recent 13.82% one-week bounce after earnings suggests the market is finally noticing fundamentals. Wall Street Sees 72% Upside. I Think That Undersells 2027 Analyst consensus sits at $12.71 with 6 Buy ratings, 2 Holds, and zero Sells. Our base-case model calls for $8.96 by year-end and $15.40 one year out, with a bull case at $22.14. Confidence is moderate at 0.5, but 75% bullish analyst sentiment signals direction.
Consensus still treats LivePerson as a wildcard rather than a done deal. Mohajer said the company “recently secured all of the needed regulatory approvals”. Combined 2027 revenue is guided to $350 million to $400 million minimum. Analysts are not pricing that in yet.
The Path to $12 Per Share Reaching $12 from today’s $7.39 would require a 62.4% gain. With forward EPS of -$0.61, a price of $12 implies a forward P/E of -20x. With SoundHound unprofitable, the right lens is price-to-sales.
At $12, market cap would sit at a mid-single-digit multiple of the $245 million guidance midpoint, and an even lower multiple of the 2027 revenue midpoint. That’s reasonable for a company compounding revenue at 45% plus with 45.1% gross margins.
Catalysts are stacking up. OASYS launched in May. Q2 wins included a multi-year 8-figure Latin America deal, a 7-figure Chinese automotive contract, and Five Guys, IHOP, and Jersey Mike’s expansion.
Risk: LivePerson integration slips into 2027 and cash burn accelerates.
Where SoundHound Trades Today vs Its Earnings Power At $7.39, SOUN sits 43% below its 52-week high and just above the $5.65 low. Price-to-book is 6.40, and the balance sheet is debt-free at 0.009 debt-to-equity ratio.
Over five years the stock is flat at -1.2%, hiding a business that has 10x’d revenue. Valuation reflects execution risk, not growth trajectory.
Is $12 Realistic? Reaching $12 by year-end requires a 62.4% gain. My verdict: a stretch, but defensible.
Three things need to break right. LivePerson must close on time, Q3 must sustain 45% growth, and cash burn must keep improving on the 33% year-over-year improvement in adjusted EBITDA loss. What derails it: any LivePerson delay forcing a dilutive raise. We’ve outlined the blueprint for how SoundHound AI could reach $12 in 2026.
Contact [email protected] for any questions or corrections.
SoundHound AI, Inc. (SOUN - Free Report) closed the last trading session at $7.41, gaining 10.8% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $11.57 indicates a 56.1% upside potential.
The average comprises seven short-term price targets ranging from a low of $7.00 to a high of $16.00, with a standard deviation of $3.21. While the lowest estimate indicates a decline of 5.5% from the current price level, the most optimistic estimate points to a 115.9% upside. More than the range, one should note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.
While the consensus price target is highly sought after by investors, the ability and unbiasedness of analysts in setting price targets have long been questionable. And investors making investment decisions solely based on this tool would arguably do themselves a disservice.
However, an impressive consensus price target is not the only factor that indicates a potential upside in SOUN. This view is strengthened by the agreement among analysts that the company will report better earnings than what they estimated earlier. Though a positive trend in earnings estimate revisions doesn't give any idea as to how much the stock could surge, it has proven effective in predicting an upside.
Price, Consensus and EPS Surprise
Here's What You May Not Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.
While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?
They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.
However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.
That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.
Why SOUN Could Witness a Solid UpsideAnalysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason to expect an upside in the stock. That's because empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current year, one estimate has moved higher over the last 30 days compared to no negative revision. As a result, the Zacks Consensus Estimate has increased 20.4%.
Moreover, SOUN currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Therefore, while the consensus price target may not be a reliable indicator of how much SOUN could gain, the direction of price movement it implies does appear to be a good guide.
The artificial intelligence (AI) boom has created a tremendous amount of value for investors over the last few years, but not every stock in this space has been a winner. SoundHound AI (SOUN -0.67%) stock, for example, soared to an all-time closing high of $24.23 in late 2024 but has since plummeted 67% to close at just $8 last Friday, Aug. 7.
The company is a leading developer of conversational AI software, with a growing list of customers that includes some of the biggest names in hospitality, automotive manufacturing, financial services, and more. SoundHound stock is still trading at an elevated valuation despite its sharp decline, but that could change after the company completes a major strategic acquisition later this year, which will provide a substantial boost to its revenue.
Should investors buy the stock today, or is there more downside ahead?
Image source: The Motley Fool.
Conversational AI is transformative for businesses Over the last few years, SoundHound's out-of-the-box products have helped businesses deploy voice-activated AI systems into their daily operations. Restaurant chains like White Castle and Panda Express use them to accept orders autonomously in-store, over the phone, and at the drive-thru, while car companies like Hyundai and Stellantis use them to power intuitive voice assistants in their latest vehicles.
But in May, SoundHound launched an entirely new platform called the Orchestrated Agent System (OASYS), which enables its customers to build custom AI voice agents to handle customer inquiries, process transactions, and assist human employees in solving complex problems.
OASYS is built on SoundHound's proprietary foundational speech recognition model, unlike many other AI software products that simply use models from third parties such as OpenAI and Anthropic. Agents built on OASYS also continually learn and improve as they become more familiar with a particular enterprise. These features are appealing to businesses seeking to differentiate their AI products from those of competitors.
SoundHound just increased its 2026 revenue forecast SoundHound generated $61.9 million in revenue during the second quarter of 2026 (ended June 30), a 45% increase from the year-ago period. It was also 10 times the revenue the company generated in the same quarter four years ago, which was its first quarter as a public company. Simply put, it has come a long way.
The second-quarter result was so strong that SoundHound increased its full-year revenue guidance for 2026 to $245 million, up from $242.5 million in its previous forecast (at the midpoint of the respective ranges).
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But SoundHound's revenue could receive a significant boost once it completes its acquisition of another AI enterprise, LivePerson, which is expected to close before the end of this year. Management is targeting revenue of $350 million to $400 million in 2027 due to the deal, representing a 53% increase (at the midpoint) from the company's projected 2026 result.
SoundHound's main challenge is balancing growth and profitability, because scaling an AI software business isn't cheap. The company suffered a generally accepted accounting principles (GAAP) net loss of $42.8 million during the second quarter. While that was a strong improvement from its year-ago loss of $74.7 million, there is still a lot of work to do before the business trades in the black.
SoundHound even lost $9.6 million by its preferred measure of profitability, adjusted (non-GAAP) earnings before interest, tax, depreciation, and amortization (EBITDA), which excludes one-off and noncash expenses such as stock-based compensation. Fortunately, the company had $203 million in cash on hand and no debt at the end of the second quarter, allowing it to sustain these losses for the foreseeable future. But it will have to reach profitability in the next few years if it wants to avoid asking investors for more money.
SoundHound's stock is pricey, despite its decline SoundHound stock currently trades at a price-to-sales (P/S) ratio of 16.7, so despite its 67% decline, it's still notably more expensive than many other AI software stocks. Moreover, the Nasdaq-100 has a P/S ratio of just 6.3, so SoundHound is more than twice as expensive as a basket of America's top technology stocks.
SOUN PS Ratio data by YCharts
Even if we assume SoundHound will generate $400 million in revenue during 2027, its forward P/S ratio would still be 8.7. That makes it a tough investment right now, given the small risk that the LivePerson deal won't officially close due to regulatory issues. There is also execution risk, meaning we don't know if LivePerson's business will be as synergistic with SoundHound's existing operations as expected.
For those reasons, I think investors might be better off waiting on the sidelines for a better opportunity. If there is a correction in the broader market, SoundHound stock could decline even further, which might be a good opportunity to pounce.
Key Takeaways SoundHound's OASYS is shortening sales cycles and accelerating customer implementations.OASYS helped secure an 8-figure commitment within 90 days of the initial demonstration.SoundHound raised its 2026 revenue outlook to $230-$260 million on strong first-half performance. SoundHound AI, Inc. (SOUN - Free Report) is positioning OASYS as a key driver of enterprise expansion, with the platform helping shorten sales cycles and accelerate customer implementations. Launched in May, OASYS helped the company move prospects from demonstrations to contracts within months and convert pilots into large implementations at a faster pace. The company also secured an 8-figure commitment less than 90 days after the initial demonstration.
This traction is reflected in SoundHound’s financial results. Second-quarter revenues rose 45% year over year to $61.9 million, while enterprise AI remained the largest revenue contributor. Growth came across healthcare, financial services, technology and automotive, providing a broader base for OASYS adoption. The company also raised its 2026 revenue outlook to $230-$260 million, citing strong first-half performance, OASYS investments, customer expansion and go-to-market efforts.
OASYS could also increase the value of SoundHound’s existing enterprise relationships. Its AI-builds-AI capability can reduce deployment time from months to minutes, while the platform supports multiple channels and use cases. Healthcare provides one example, with seven deals signed in the quarter and one top-20 provider quadrupling spending. Financial services also added contract expansions with two of the top seven global banking institutions and a major global insurer.
With larger deals, faster implementations and expansion across enterprise verticals, OASYS has the potential to strengthen SoundHound’s enterprise growth prospects. The ability to convert adoption into recurring and expanding customer relationships will remain important as the platform scales.
SoundHound vs. Other Market PlayersSoundHound competes with C3.ai, Inc. (AI - Free Report) and NICE Ltd. (NICE - Free Report) in the rapidly expanding enterprise AI market.
C3.ai provides enterprise AI applications and a platform aimed at helping businesses deploy AI across multiple industries. Its broad enterprise AI opportunity and focus on large accounts provide avenues for growth as companies increase AI adoption. However, weak sales execution has weighed on C3.ai’s growth, with it undertaking a major restructuring of the sales organization and go-to-market strategy.
Meanwhile, NICE focuses on customer engagement through its CXone platform, combining customer interactions, human agents and AI capabilities. Its integrated platform, enterprise-scale deployments and native Cognigy integration provide a competitive advantage as customers shift from fragmented solutions toward unified AI platforms. However, the move toward larger enterprise AI deployments can lengthen the time between bookings and revenues as customers prepare data, governance and operating models before moving AI into production.
SoundHound’s focus on voice AI, faster deployments and expansion across enterprise verticals gives it a distinct position in the market. However, C3.ai’s broad enterprise AI platform and NICE’s established customer engagement platform create competition as enterprises increase spending on AI solutions.
SOUN’s Price Performance, Valuation & EstimatesSoundHound’s shares have lost 25.1% year to date (“YTD”), underperforming the industry, as shown below.
SOUN’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, SOUN trades at a forward price-to-sales (P/S) multiple of 12.45, slightly above the industry’s average.
SOUN’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Over the past seven days, the Zacks Consensus Estimate for SoundHound’s 2026 loss per share has narrowed to 14 cents, as shown below. The expected loss remains wider than the previous year’s loss of 13 cents per share.
EPS Trend of SOUN Stock
Image Source: Zacks Investment Research
SOUN currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SoundHound AI (SOUN -6.98%) released its second-quarter results last week, and the voice artificial intelligence (AI) company hit a new all-time high for revenue. On top of that, it also boosted its full-year guidance, as the business is getting bigger and benefiting from greater demand for its services.
The business remains unprofitable, but the market appeared bullish on the results nonetheless, with SoundHound's stock rising after the numbers came out. Is the AI stock a good buy in light of the earnings report, and can it be headed higher this year? Let's take a closer look at its financials.
Image source: Getty Images.
SoundHound's top line rose by 45% For the period ending June 30, SoundHound's revenue came in at $61.9 million, which represented a year-over-year increase of 45%. That growth is impressive, but investors should be aware that it's also heavily due to acquisitions, as SoundHound has bought up other tech companies in recent years in an effort to grow and diversify its operations. It can be a risky strategy as integrations don't always go smoothly, plus, they add cost and complexity along the way.
The good news is that the company's gross margin improved from 39% a year ago to just over 45% this past quarter. A stronger margin means a lower proportion of revenue goes to cover the cost of goods sold, and that can shrink losses and improve prospects for profitability. And that's just what happened -- SoundHound's net loss of 42.8 million was a big improvement from the $74.7 million loss it incurred in the prior-year period.
For the full year, SoundHound is projecting its revenue to be within a range of $230 million to $260 million. It's an increase on the lower end of the range as SoundHound was previously forecasting at least $225 million in revenue. The top end of the guidance, however, remains unchanged.
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Is SoundHound's stock a buy after these results? SoundHound posted strong numbers in Q2, but it still incurred a loss and its cash burn remains problematic; over the past six months, the company has used up nearly $60 million just to fund its day-to-day operating activities, up from around $44 million a year ago.
While SoundHound did post some solid top-line growth, acquisitions make it difficult to assess the true organic growth of the business. And although it raised its guidance, it wasn't significant. Meanwhile, it continues to burn through a lot of cash and incur losses. Overall, the earnings report simply wasn't strong enough to prove that it's become a better buy than it was before the latest numbers came out; SoundHound is still a stock I'd hold off on buying.
Keyvan Mohajer, CEO of SoundHound AI (SOUN), discusses his company's recent earnings which have grown ten times since the IPO four years ago. One factor he sees driving future growth: the company's OASYS platform, which he calls "decades in the making.
This is a fair market value price provided by Massive. Learn more.
52-Week Range$5.65▼
$22.17Price Target$14.00
SoundHound AI’s NASDAQ: SOUN market sent a clear signal following its Q2 earnings report, surging more than 30% on the news and closing the week at its highs. The move reveals solid support at long-term lows, a critical support target given the ultra-high short interest, and a high probability that this market will complete a reversal.
While short-sellers had ample reason to sell into this market, they’ve overdone it, pushing short interest to over 40%, and now short-covering is in play, driven by a strengthening fundamental story. Technically, SOUN is showing a Double Bottom reversal pattern and has only a single hurdle remaining, as of early- to mid-August - the pattern’s baseline, a resistance point that may be easily broken.
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Analysts Praise SoundHound Results: Some Caution RemainsAlthough analysts had mixed responses, with some citing valuation concerns, execution risks, and cash burn, the outlook remains optimistic. Cautious responses were offset by positives, including robust affirmations from Cantor Fitzgerald and Oppenheimer. They view SoundHound as a best-in-class voice AI play with deal activity driving solid results and momentum across segments. They focus on the fast top-line growth, underpinned by large enterprises, and the upcoming LivePerson acquisition as near-term catalysts, and are confident the company can reach its goals.
Current Price$7.49High Forecast$20.00Average Forecast$14.00Low Forecast$7.00SoundHound AI Stock Forecast Details
The takeaway for investors is that nine analysts provide a modest conviction in the Moderate Buy rating, there is a 55.5% Buy-side bias within the data, and about 85% of upside at the consensus target, which is well above the critical resistance point.
With support strengthening, as indicated by technical signals, and catalysts such as improving business momentum and acquisitions in play, the likely outcome is that SoundHound's price action completes its reversal by year’s end. The high short interest and analysts' caution point to some near-term turbulence as the market completes its reversal, but larger stock price advances are likely by year’s end and in early 2027 as results reveal strategic traction.
Technical signals suggesting market traction include the price action, trading volume, the MACD histogram, and the stochastic oscillator. Price action reveals buying, volume suggests the move is solid, and MACD reveals the bulls are regaining control. In this scenario, stochastic shows the market is incredibly oversold, ready to advance, and has ample room to run. The combined result is a firm support target at $5.90, which limits risk in Q3, support echoed by institutional activity, coupled with a robust upside.
SoundHound Raises Guidance as OASYS Gains TractionSoundHound’s stock price outlook centers in large part on the OASYS platform. It is a cloud-native, user-friendly platform for agentic AI development. The basic platform ingests company-specific materials and creates agentic processes to handle operations, including customer-facing ones. Among the benefits are ease of use; agents can be up and running in minutes, and self-learning capability. OASYS agents evaluate their own performance, offering patches and fixes for developers to approve. What it means for the business is a higher-margin revenue stream with potential to accelerate growth.
SoundHound’s Q2 results reveal end-market users find utility with the product. The company’s revenue grew by 45%, outpacing the consensus estimate by more than 1800 basis points. Strength was seen across industries and verticals, aided by new clients, new verticals, renewals, and production penetration.
Margin is another highlight, with operating and business losses narrowing sharply. The adjusted two-cent loss is three cents better than expected, playing into management's decision to raise guidance. Guidance is the operative factor, with full-year revenue expected at $230 million at the low end of the range, compared to the $232 consensus, and margin improvement on the table. As it stands, SoundHound may not need to raise additional capital, but it is dependent on margin improvement and the successful integration of LivePerson.
SoundHound: Execution Is Critical in the Back Half of 2026SoundHound’s catalysts are its expanding OASYS business and the LivePerson integration. While OASYS underpins organic growth and margin improvement, LivePerson will instantly increase the user base and cross-selling opportunities while expanding the addressable market. The company expects rapid uptake, as LivePerson’s clientele has been exiting in favor of services like SoundHound's. Management didn't provide any specifics, but the deal is expected to close by year’s end, potentially doubling SoundHound’s 2027 revenue outlook when it does.
SoundHound’s biggest risks are competition and execution. All major hyperscalers actively work and deploy agentic voice AI and could render SoundHound’s product moot. The difference is that SoundHound provides superior functionality, having focused on voice-to-meaning from the beginning rather than using voice-to-text as its starting point. Execution is the bigger risk, with cash burn already an issue. Missteps and delays, unexpected costs, and capital need will all be reflected in the stock price and may keep short-sellers in the market until more concrete evidence of business momentum and profitability exists.
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Key Takeaways SoundHound's Q2 revenues jumped 45% to a record $61.9M as enterprise demand for OASYS strengthened.SOUN raised its 2026 revenue outlook to $230-$260M, lifting the lower end by $5M after first-half gains.OASYS cut development timelines, while GAAP gross margin rose 610 basis points to 45.1% in Q2. SoundHound AI, Inc. (SOUN - Free Report) delivered a record second quarter as enterprise demand for OASYS helped lift revenues and management raised the floor of its 2026 outlook. The result strengthens the case that the platform is becoming a more meaningful growth driver.
Investors now have a tougher test to watch. Faster deal conversion and improving margins need to persist while SoundHound absorbs acquisition risk and works toward better cash generation.
SoundHound's Record Q2 Shows OASYS MomentumSecond-quarter revenues rose 45% year over year to a record $61.9 million, topping the Zacks Consensus Estimate of $52.49 million by 17.9%. The adjusted loss narrowed to 2 cents per share from 3 cents a year earlier and beat the consensus estimate of 3 cents.
Management attributed the top-line growth to major enterprise AI deals linked to OASYS. The self-learning, orchestrated platform lets customers build and deploy conversational agents across phones, chat, kiosks, smart devices, drive-thrus, televisions and vehicles.
SOUN's Guidance Raise Extends the Growth StorySoundHound raised its 2026 revenue outlook to $230-$260 million from $225-$260 million, lifting the lower end by $5 million. The revision followed its first-half performance and continued demand for OASYS and the company's broader voice and agentic AI portfolio.
The Zacks Consensus Estimate for 2026 sales is $233 million, up 37.9% from 2025. That figure sits near the lower end of management's new range, while the unchanged $260 million ceiling leaves the raised floor as the principal guidance change.
OASYS Helps SoundHound Shorten Deal TimelinesManagement said work that previously took months can now be built in minutes using OASYS. One eight-figure commitment moved from demonstration to contract in less than 90 days. OASYS also helped SoundHound convert pilots and customer evaluations more quickly.
Cerence Inc. (CRNC - Free Report) , a listed Zacks industry peer, develops conversational AI for automotive use cases. Five9, Inc. (FIVN - Free Report) , another listed peer, offers agentic and voice AI for contact centers. Those businesses frame the competitive pressure SoundHound faces across automotive and enterprise customer-service deployments.
SOUN's Margin Improvement Adds Quality to the BeatGAAP gross margin expanded 610 basis points year over year to 45.1% from 39%, while GAAP gross profit rose 68% to $27.9 million. Adjusted EBITDA loss narrowed 33% to $9.6 million from $14.3 million.
Non-GAAP gross margin was unchanged at 58.4%, indicating stable underlying gross profitability after the company's adjustments. Losses remain material, however. GAAP net loss totaled $42.8 million and first-half operating cash outflow widened to $60 million from $43.7 million a year earlier.
SoundHound's Outlook Excludes LivePerson UpsideThe new 2026 outlook does not contemplate SoundHound's pending acquisition of LivePerson, Inc. (LPSN - Free Report) . SoundHound expects the transaction to close before the end of 2026 and plans to update guidance after completion.
That structure leaves any post-close contribution outside the current range, but the transaction also adds execution risk. SoundHound must integrate technologies, engineering teams and enterprise platforms while continuing to convert OASYS demand into scaled deployments.
SoundHound's Scores Temper the Post-Earnings SetupThe second-quarter report strengthens the operating case for OASYS, but the next phase depends on whether faster deployments can support durable margin improvement and better cash generation while acquisition risks remain in focus.
SOUN currently carries a Zacks Rank #3 (Hold), a VGM Score of F, Value Score of F, Growth Score of D and Momentum Score of F. The Zacks Rank reflects earnings-estimate revisions over a one- to three-month horizon, while the Style Scores assess value, growth and momentum characteristics. The weaker grades temper the setup despite the stronger quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways SoundHound's 2026 revenues are projected at $233 million, up 37.9% from 2025.OASYS can cut enterprise deployment times, with one eight-figure deal signed in under 90 days.SOUN faces premium valuation, ongoing losses, cash burn, dilution and LivePerson integration risk. SoundHound AI, Inc. (SOUN - Free Report) offers a high-growth enterprise AI story, but the stock still asks investors to accept a premium sales multiple, ongoing losses and substantial execution risk.
The case for buying SOUN therefore depends on whether faster adoption of its conversational and agentic AI platform can translate into durable revenue growth and better cash generation.
SoundHound's 37.9% Sales Growth Supports the Bull CaseThe Zacks Consensus Estimate calls for 2026 revenues of $233 million, up 37.9% from 2025. That growth rate supports the bull case as SoundHound expands beyond its historical automotive exposure.
Second-quarter wins and renewals spanned health care, banking, insurance, telecommunications, automotive, restaurants and retail. The wider customer mix gives SOUN more avenues for growth as enterprise AI demand broadens.
OASYS Gives SOUN a Faster Path to Enterprise ScaleOASYS is central to SoundHound's effort to shorten enterprise deployments and unify conversational and agentic AI across channels. Management said tasks that previously took months can now be built in minutes, while one eight-figure commitment moved from demonstration to contract in less than 90 days.
Salesforce, Inc. (CRM - Free Report) is an industry peer for SOUN. Microsoft Corporation (MSFT - Free Report) is another, reinforcing that SoundHound is scaling OASYS in a competitive enterprise technology market.
SOUN's Valuation Leaves Little Room for Execution SlipsSOUN's forward 12-month price-to-sales ratio is 12, compared with 11.84 for the Zacks sub-industry, 6.51 for the Zacks Computer and Technology sector and 5.03 for the S&P 500. The premium means growth expectations remain elevated.
The ratio is below SoundHound's five-year median of 14.2. The stock is therefore cheaper than its own historical norm, but it is not inexpensive relative to broader benchmarks.
SoundHound's Losses and Dilution Argue for CautionSoundHound posted a second-quarter GAAP net loss of $42.8 million and used $60 million of operating cash in the first half of 2026. Those figures show that rapid revenue expansion has not yet produced sustainable profitability or positive operating cash flow.
The company raised about $48.5 million through Class A share sales in the first half, while outstanding Class A shares rose to 403.3 million from 390.1 million at year-end 2025. Cash totaled $202.8 million at June 30, 2026, and the company had no debt, but further cash burn could keep dilution risk in focus.
SOUN's LivePerson Upside Comes With Integration RiskThe planned LivePerson acquisition would broaden SoundHound's enterprise reach and add customers that include 25 Fortune 100 brands. Assuming the deal closes successfully, management expects at least $350 million to $400 million in 2027 revenues.
The transaction also raises integration risk. Combining technologies, engineering teams, corporate cultures and enterprise platforms could strain execution, while the expected benefits depend on successful cross-selling, cost synergies and continued customer adoption.
SoundHound's Scores Favor a Wait-and-Watch StanceSoundHound's growth outlook is substantial, but its valuation, losses, cash burn and acquisition demands make the risk-reward balance less clear. That supports a wait-and-see stance until execution and cash generation improve.
SOUN currently carries a Zacks Rank #3 (Hold), with a VGM Score of F, Value Score of F, Growth Score of D and Momentum Score of F. The Style Scores complement the Zacks Rank, and A or B grades are more favorable than D or F. The Growth Score also considers financial-statement quality, not sales growth alone. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways SOUN shares fell 16.9% in three months despite stronger Q2 revenues, adoption and operating metrics.SoundHound's Q2 revenues rose 45% to $61.9M as GAAP gross margin expanded to 45.1%.SoundHound still faces a $42.8M GAAP net loss, higher cash burn, dilution and a premium sales multiple. SoundHound AI, Inc. (SOUN - Free Report) shares have lost 16.9% in the past three months even as second-quarter revenues, enterprise adoption and operating metrics improved. That split between price action and business momentum makes the pullback more nuanced than the headline decline suggests.
The case for a rebound rests on sustained growth and better cost discipline. Persistent losses, rising operating cash use, equity issuance and a premium valuation still give investors reasons to be selective.
SOUN's Decline Has Trailed Major BenchmarksOver the same three-month span, SoundHound's Zacks sub-industry gained 3.8%, the Computer and Technology sector rose 1.5% and the S&P 500 advanced 2.8%. The divergence puts more weight on company-specific execution, profitability and valuation questions.
The underperformance also creates a sharper test. If growth and margins continue improving, sentiment could recover. If cash burn and losses remain elevated, the discount to prior trading levels may prove justified.
SoundHound's Q2 Growth Strengthens the Fundamental CaseSecond-quarter revenues reached a record $61.9 million, up 45% year over year, and exceeded the Zacks Consensus Estimate by 17.9%. Enterprise AI was the largest revenue contributor, with customer activity spanning healthcare, financial services, telecommunications, automotive and restaurants.
Management raised its 2026 revenue outlook to $230-$260 million from $225-$260 million. Five9, Inc. (FIVN - Free Report) is expanding voice AI agents within its Intelligent CX Platform for enterprise customer service. Cerence Inc. (CRNC - Free Report) is advancing agentic, large-language-model-powered in-car experiences, underscoring the competitive backdrop SoundHound faces.
SOUN's Margin Gains Point to Better Cost DisciplineGAAP gross margin expanded to 45.1% from 39% a year earlier as gross profit climbed 68% to $27.9 million. The improvement shows that revenue growth is beginning to translate into better operating metrics.
Adjusted EBITDA loss narrowed to $9.6 million from $14.3 million. Still, SoundHound posted a GAAP net loss of $42.8 million, so better operating metrics have not yet produced profitability.
SoundHound's Cash Burn and Dilution Keep Risk HighNet cash used in operating activities widened to $60 million in the first half of 2026 from $43.7 million a year earlier. SoundHound had $202.8 million in cash and cash equivalents at June 30 and no debt, providing liquidity but not eliminating cash-burn risk.
The company raised about $48.5 million through Class A common-stock sales in the first half. Class A shares outstanding increased to 403.3 million from 390.1 million at year-end 2025, keeping dilution risk relevant if internal cash generation remains weak.
SOUN's Premium Sales Multiple Raises the BarSOUN trades at 12.0X forward 12-month sales, versus 11.8X for its Zacks sub-industry, 6.5X for the sector and 5.0X for the S&P 500. That premium leaves little room for execution setbacks.
The multiple is below SoundHound's five-year median of 14.2X, but a discount to its own history does not make the stock inexpensive versus broader benchmarks. Sustained growth, margin progress and better cash conversion would strengthen the valuation case.
SoundHound's Scores Still Favor Investor PatienceThe bottom line is mixed. Revenue growth and margin improvement have strengthened SoundHound's operating case, while persistent losses, cash burn, dilution and valuation keep the three-month decline from looking like a clear-cut opportunity.
SOUN currently carries a Zacks Rank #3 (Hold), with a VGM Score of F, Value Score of F, Growth Score of D and Momentum Score of F. A #3 Rank supports patience, while the weak Style Scores offer limited support from value, growth and momentum characteristics. Those readings do not rule out a rebound, but they argue against treating the pullback alone as a buying signal. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways SoundHound posted Q2 revenues of $61.9M, up 45%, and raised 2026 revenue guidance to $230M-$260M.OASYS is converting pilots to larger deployments at a record pace as pipeline and win rates strengthen.OUN's adjusted EBITDA loss improved 33% to $9.6M as cloud, infrastructure and in-house AI cut costs. SoundHound AI, Inc. (SOUN - Free Report) used its second-quarter 2026 call to emphasize accelerating enterprise adoption of OASYS, stronger deal conversion and a raised full-year revenue outlook. Management also highlighted improving profitability measures despite continued investment.
The quarter produced $61.9 million in revenues, up 45% year over year, versus the Zacks Consensus Estimate of $52.49 million. Non-GAAP loss per share was 2 cents, compared with the consensus loss estimate of 3 cents.
SOUN Raises 2026 Revenue OutlookInterim CFO and co-founder James Hom raised 2026 revenue expectations to $230 million to $260 million after the strong first half. The outlook excludes the pending LivePerson acquisition.
Hom said SoundHound intends to remain aggressive in capturing market share through existing-customer expansion, new customer wins and targeted investments in channels and OASYS.
CEO and co-founder Keyvan Mohajer said management expects to update guidance after LivePerson closes, which the company continues to expect before year-end.
SoundHound Puts OASYS at the CenterMohajer described OASYS as a major contributor to second-quarter performance. He said SoundHound is moving prospects from demonstrations to signed contracts in months and converting pilots to larger deployments at a record pace.
In response to a Cantor Fitzgerald analyst, Mohajer said the company’s pipeline and win rate have never been stronger. He pointed to wins in demonstrations, RFPs and pilots as evidence of OASYS traction.
He also detailed OASYS’ “AI builds AI” capability, which can reduce complex agent-development work from months to minutes and support automated improvement after deployment.
SOUN Sees Broad Enterprise ExpansionHom said enterprise AI remained SoundHound’s largest revenue contributor, with growth spanning healthcare, financial services, technology and automotive. Healthcare generated seven deals, including one seven-figure agreement.
Mohajer highlighted continued momentum in Asia, where SoundHound has signed major deals for five consecutive quarters. The company landed a seven-figure China automotive infotainment deal and expanded generative AI deployments with Stellantis and Hyundai.
Restaurants also remained an expansion area. Mohajer said renewal rates reached 100% for key accounts, while Smart Answering more than doubled year over year and several major restaurant chains expanded location coverage.
SoundHound Targets Margin Gains From In-House AIHom said GAAP gross margin reached 45.1%, up 6.1 percentage points year over year, while non-GAAP gross margin was 58.4%. Adjusted EBITDA loss improved 33% to $9.6 million.
Management attributed efficiencies to infrastructure modernization, cloud optimization, legacy-system consolidation and increased use of in-house technology. Hom said the company still expects gross margin to exceed 70% over time.
Mohajer added that smaller customers now run entirely on SoundHound’s own stack, while one large healthcare customer is preparing to switch. He tied the model strategy to lower costs, higher quality and greater control.
SOUN Clarifies LivePerson Path in Q&AA D.A. Davidson analyst asked how guidance changes under a LivePerson closing scenario. Mohajer reiterated that current 2026 guidance excludes the acquisition and that timing uncertainty prevents a precise contribution estimate.
A Northland Capital Markets analyst asked about 2027 expectations. Mohajer maintained the previously discussed $350 million to $400 million range, assuming the merger closes successfully in the second half of 2026.
Mohajer also identified two key integration opportunities: upgrading LivePerson customers to OASYS and adding voice capabilities to LivePerson’s digital customer-service base. He said regulatory clearances have been secured.
SoundHound Keeps Focus on Scale and DisciplineManagement’s tone centered on expanding enterprise adoption while maintaining cost discipline. Hom said SoundHound plans to keep investing in technology and go-to-market capacity as it works toward profitable growth.
Mohajer emphasized OASYS, proprietary models, channel partnerships and acquisitions as the company’s main scaling levers. He also pointed to upcoming Voice Commerce projects in vehicles and televisions as additional use cases.
The call left management focused on converting a larger pipeline, broadening deployments within existing accounts and preparing for LivePerson integration without including the acquisition in current-year guidance.
SOUN Rank and Style Scores Point to CautionSOUN currently carries a Zacks Rank #3 (Hold). Its Value Score is F, Growth Score is D, Momentum Score is F and VGM Score is F, leaving the shares without the stronger A or B style characteristics emphasized in the Zacks framework. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Style Scores are designed to complement the Zacks Rank, with higher grades indicating more favorable characteristics. Investors should note that the Zacks Rank can change as earnings estimates are revised following the just-reported results.
Shares of SoundHound AI (SOUN +10.11%) popped on Thursday after the conversational intelligence leader boosted its full-year revenue forecast.
Image source: Getty Images.
AI agent-fueled growth SoundHound's revenue jumped 45% year over year to $62 million in the second quarter.
Chief financial officer James Hom said SoundHound's recently launched agentic AI platform, OASYS, was helping it win more business from large corporate clients. The self-learning system helps companies use conversational AI agents to automate transactions and other tasks for their customers and employees.
"We are excited by the strong interest we are already seeing with OASYS, which is a testament to the category-defining technology we continue to deliver to the market," Hom said.
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All told, SoundHound's adjusted net loss narrowed to $9 million from $12 million in the year-ago quarter. Its adjusted loss per share of $0.02 was also better than Wall Street's estimate of $0.05.
"Our exceptional Q2 results demonstrate the momentum SoundHound is building, achieving a strong revenue performance, disciplined cost management, and industry-leading platform validation," CEO Keyvan Mohajer said.
An intriguing merger is advancing These solid results prompted SoundHound to lift its full-year 2026 revenue target to between $230 million and $260 million.
Management also said it would provide investors with an updated financial forecast after the expected closing of SoundHound's acquisition of fellow conversational AI pioneer LivePerson.
"We recently secured all key regulatory clearances and continue to expect the deal to close before the end of the year," Mohajer said during a conference call with analysts.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends SoundHound AI. The Motley Fool has a disclosure policy.
SoundHound AI (SOUN +10.11%), a voice AI platform for enterprise and automotive conversational experiences, closed at $7.08, up 10.11%. The stock surged after record quarterly revenue, a smaller-than-expected loss, and raised full-year guidance; investors are watching management commentary on revenue, margins, and the LivePerson acquisition. Trading volume reached 88.0M shares, coming in about 187% above its three-month average of 30.7M shares. SoundHound AI IPO'd in 2022 and has fallen 6% since going public.
How the markets moved todayThe S&P 500 (^GSPC -0.18%) fell 0.16% to 7,711, and the Nasdaq Composite (^IXIC -0.06%) slipped 0.06% to 26,348. Among conversational AI software and voice technology peers, Cerence (CRNC -2.17%) closed at $9.02, down 2.17%, while SoundHound AI outperformed sector rivals during Thursday's session.
What this means for investorsIt was a good day for SoundHound AI investors as the stock blew past analysts’ expectations for the second quarter. Sales rose 45% in Q2, and the company’s adjusted net income margin improved from -28% to -15%, as margins continued to improve quickly. Management also raised sales guidance to $245 million at the midpoint for 2026, excluding the potential closing of its LivePerson acquisition, which would, if closed, expand its omnichannel messaging capabilities.
While SoundHound still needs to rein in stock-based compensation (SBC) over time — SBC still equals a whopping 45% of sales — the company continues to land new contracts across a wide array of customer verticals, including financial services, restaurants, healthcare, telecos, retail, and, of course, autos. Trading at roughly 11 times forward sales, SoundHound isn’t outrageously priced if it can continue to experience the hyper-growth it has seen over the last five years and keep improving its margins steadily.
That said, SoundHound will remain a volatile option for investors, and it is yet to be determined just how wide a moat the company has, if any, so interested investors should buy in small batches over time, rather than going “all-in” today.
Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends SoundHound AI. The Motley Fool recommends Cerence. The Motley Fool has a disclosure policy.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Let's take a look at what these Wall Street heavyweights have to say about SoundHound AI, Inc. (SOUN - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
SoundHound AI currently has an average brokerage recommendation (ABR) of 1.75, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by eight brokerage firms. An ABR of 1.75 approximates between Strong Buy and Buy.
Of the eight recommendations that derive the current ABR, five are Strong Buy, representing 62.5% of all recommendations.
Brokerage Recommendation Trends for SOUN
Check price target & stock forecast for SoundHound AI here>>>
While the ABR calls for buying SoundHound AI, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is SOUN a Good Investment?Looking at the earnings estimate revisions for SoundHound AI, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at -$0.15.
Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for SoundHound AI. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for SoundHound AI.
SoundHound SOUN shares are ripping higher on Thursday morning after the company reported blowout Q2 earnings and issued upbeat guidance that forced short sellers to cover their positions.
Still, peeling back the layers of SOUN’s quarterly print reveals several headwinds and pockets of operational weakness that warrant taking at least some profits off the table.
Despite the post-earnings rally, SoundHound stock remains down some 25% year-to-date.
While bulls would point to a surprise per-share profit of $0.02 in the second quarter, caution is still warranted in playing SOUN shares primarily because it relied heavily on non-GAAP adjustments.
In Q2, the AI-enabled voice recognition specialist lost $42.8 million on a GAAP basis, compared to a non-GAAP net loss of just $9 million.
This massive gap between the two is mostly due to $21 million in stock-based compensation (SBC) and $11 million in depreciation/amortization.
Paying out more than 33% of quarterly sales in SBC means investors are absorbing ongoing share dilution to fund the operational beat.
What’s also worth mentioning is that the post-earnings surge helped SoundHound break above its major moving averages (MAs), so part of today’s rally is related to algorithmic buying as well.
Accelerating cash burn remains an overhangConservative investors should take profit in SoundHound shares at current levels also because cash generation – despite topline growth – worsened in fiscal Q2.
In the first six months of 2026, the company’s operating cash “outflow” reached $-60 million – up significantly from -$43.7 million during the same period last year.
Crucially, SOUN ended the quarter with total cash reserves of roughly $203 million.
At about a $30 million per quarter operating cash burn rate, its cash runway remains a focal point if topline growth decelerates or integration outlays rise.
Investors should also note that the firm’s relative strength index (RSI) – at the intraday high – was seen in the mid-60s, indicating the AI stock is approaching “overbought” territory.
Finally, SoundHound’s non-GAAP adjusted margin remained essentially flat at 58.4%.
For a high-multiple pure-play AI software company, target gross margins are generally expected near 70%.
The lack of non-GAAP margin expansion despite 45% sales growth suggests cloud infrastructure, inferencing compute cost, and third-party model licensing fees are scaling alongside revenue rather than yielding immediate operating leverage.
Importantly, management noted that the lifted full-year outlook ($230 million to $260 million) will be adjusted further once the acquisition of LivePerson closes later this year.
Integrating a large customer service legacy platform that has historically struggled with declining organic growth and legacy tech debt carries execution risks, potential customer churn during migration, and near-term margin dilution.
That said, Wall Street continues to rate SOUN stock at Overweight with a bullish mean price target of $12.
Key Takeaways SOUN posted record Q2 revenue of $61.9M, beat estimates, and narrowed adjusted loss to 2 cents.SoundHound expanded enterprise wins across health care, finance, automotive and restaurants with OASYS.SOUN raised its 2026 revenue outlook to $230M-$260M, excluding the pending LivePerson acquisition. SoundHound AI, Inc. (SOUN - Free Report) delivered a strong second-quarter 2026 performance, with earnings and revenues surpassing expectations. The quarter reflected accelerating enterprise demand for voice and agentic AI, major OASYS-driven deals and improving cost discipline. Profitability strengthened year over year, with higher GAAP gross margin and narrower adjusted EBITDA and net losses.
Following the results, the company’s shares gained around 23.3% in the after-hours trading session yesterday. The increase was likely supported by the sizable revenue beat, better profitability metrics, strong enterprise deal momentum and the raised full-year revenue outlook.
SOUN’s Revenues and EarningsIn the second quarter, SoundHound reported record revenues of $61.9 million, up 45% year over year. The figure surpassed the Zacks Consensus Estimate of $52.49 million by 17.9%. Management attributed the top-line growth to major enterprise AI deals linked to OASYS, reflecting rising adoption of the company’s voice and agentic AI offerings across industries.
The company posted an adjusted loss of 2 cents per share compared with the Zacks Consensus Estimate of a loss of 3 cents, representing a favorable surprise of 33.3%. The adjusted loss also narrowed from 3 cents per share in the prior-year quarter.
SOUN’s Margins Improve on Cost DisciplineOn a year-over-year basis, SOUN’s profitability improved. GAAP gross profit rose 68% to $27.9 million from $16.7 million, while GAAP gross margin expanded to 45.1% from 39%, reflecting stronger growth in gross profit than revenues.
Non-GAAP gross profit increased 45% to $36.2 million. Non-GAAP gross margin remained unchanged at 58.4%, indicating stable underlying profitability after excluding amortization, stock-based compensation and acquisition-related expenses.
Adjusted EBITDA also improved year over year, with the loss narrowing to $9.6 million from $14.3 million. Non-GAAP net loss decreased 24% to $9 million, while GAAP operating loss narrowed to $43.3 million from $78.1 million.
SOUN’s Enterprise Pipeline Keeps BroadeningManagement highlighted rising demand across health care, financial services, telecommunications, automotive, restaurants and consumer-facing applications. In health care, SoundHound signed a seven-figure agreement with a nationally ranked system employing 30,000 people across hospitals, health parks and medical offices.
The company also secured new and expanded business with health care technology, pharmacy care and electronic health record customers. Financial services renewals included a Japanese online brokerage serving more than 6 million accounts, a global asset manager, a major U.S. bank and a Canadian financial services organization.
Automotive activity included a seven-figure deal with an infotainment software company in China. Stellantis increased overall unit adoption and added live generative AI capabilities, while Hyundai expanded its adoption of the technology. Restaurant wins and expansions included Ruby Tuesday, Five Guys, IHOP and Jersey Mike’s.
SoundHound’s OASYS Drives Enterprise AdoptionOASYS remained central to SoundHound’s enterprise growth strategy. Management said major agreements attributed to the platform supported the quarter’s record revenues and demonstrated strong customer interest in deploying voice and agentic AI across business workflows.
The company describes OASYS as a self-learning, orchestrated platform that allows organizations to build and deploy conversational agents across phones, chat, kiosks, smart devices, drive-thrus, televisions and vehicles. Its broader deployment model is intended to support transactions, tasks and customer-service workflows across digital and physical channels.
SoundHound also expanded its distribution reach through a multi-year partnership in Latin America representing an initial eight-figure agreement. The arrangement covers a network spanning more than 20 countries. A partnership with a global IT services provider is expected to extend access to enterprise digital-transformation customers.
SoundHound’s Balance Sheet Remains Debt-FreeAs of June 30, 2026, SOUN ended the quarter with $203 million in cash and cash equivalents and no debt. The debt-free position preserves financial flexibility as the company continues investing in platform development and prepares for the pending LivePerson transaction.
Operating cash flow weakened year over year during the first half. Net cash used in operating activities was $60 million compared with $43.7 million in the prior-year period. Net cash used in investing activities totaled $32.7 million, while financing activities provided $46.7 million.
The quarter’s GAAP results included an approximately $4 million gain tied to the revaluation of contingent acquisition liabilities. This noncash item was excluded from the company’s non-GAAP performance measures.
SOUN Raises Its 2026 Revenue OutlookFor 2026, SOUN raised its revenue outlook to $230 million to $260 million from the previous range of $225 million to $260 million. The revision followed the company’s strong second-quarter performance and reflected continued demand for OASYS and its broader voice and agentic AI portfolio.
The outlook does not yet contemplate the pending acquisition of LivePerson. SoundHound expects the transaction to close before the end of 2026 and plans to update its guidance after the deal is completed.
SOUN Stock’s Zacks Rank & Key PicksSoundHound currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector are NVIDIA Corporation (NVDA - Free Report) , Broadcom Inc. (AVGO - Free Report) and Dell Technologies Inc. (DELL - Free Report)
NVIDIA carries a Zacks Rank #2 (Buy) at present. It has a trailing four-quarter earnings surprise of 5.5% on average. Shares of NVDA have plunged 17.6% year to date ("YTD"). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 EPS indicates 90.6% growth on 106.9% revenue rise from the year-ago levels.
Broadcom currently holds a Zacks Rank of 2. It has a trailing four-quarter earnings surprise of 2.2%, on average. Shares of AVGO have gained 20.9% YTD.
The Zacks Consensus Estimate for Broadcom’s fiscal 2026 EPS implies a 72.1% rise on 66% revenue growth, from the year-ago levels.
Dell currently carries a Zacks Rank of 2. It has a trailing four-quarter earnings surprise of 18.7%, on average. Shares of DELL have gained 267.6% YTD.
The Zacks Consensus Estimate for Dell’s fiscal 2027 sales and EPS indicates 82.5% and 67.6% growth, respectively, from the year-ago levels.
SoundHound AI (NASDAQ:SOUN) reported record second-quarter revenue of $61.9 million, up 45% from a year earlier and 40% sequentially, as the company cited demand for its conversational and agentic AI offerings across healthcare, financial services, automotive, restaurants and other industries.
Chief Executive Officer and Co-Founder Keyvan Mohajer said the quarter was the company’s largest to date, with improvements in gross margin, adjusted EBITDA and earnings per share both year over year and sequentially. He attributed a significant portion of the performance to OASYS, the self-learning agentic AI platform SoundHound launched publicly in May.
“Our results were beyond our own expectations,” Mohajer said, adding that OASYS has helped the company win demonstrations, requests for proposals, pilots and production deployments. He said SoundHound recently signed an eight-figure commitment less than 90 days after an initial demonstration.
Financial Results and Raised Outlook Chief Financial Officer and Co-Founder James Hom said growth was broad-based, led by enterprise AI and supported by healthcare, financial services, technology and automotive. SoundHound’s enterprise AI business remained its largest revenue contributor, while its automotive operations in Asia posted substantial growth for a fifth consecutive quarter, according to Hom.
Revenue totaled $61.9 million, up 45% year over year. GAAP gross margin was 45%, up six percentage points from the prior-year quarter. Non-GAAP gross margin was 58%, flat year over year and up eight percentage points sequentially. GAAP operating loss was $43.3 million, an improvement of 45% from a year earlier. Adjusted EBITDA loss was $9.6 million, improving 33% year over year. GAAP net loss was $42.8 million, or $0.10 per share. Non-GAAP net loss was $9 million, or $0.02 per share. Cash and equivalents totaled $203 million at quarter-end, with no debt. Hom said the company has been working to improve efficiency through infrastructure modernization, cloud-spending optimization, legacy-system consolidation, adoption of in-house technology and acquisition synergies. Acquisitions have temporarily weighed on gross margin, he said, but the company expects margins to exceed 70% in the future, similar to levels when it became public.
SoundHound raised its full-year revenue outlook to a range of $230 million to $260 million, reflecting its first-half performance and continuing demand. The outlook does not include the planned acquisition of LivePerson because the timing of the transaction’s closing remains uncertain.
OASYS Adoption Across Verticals Mohajer said OASYS is designed to enable companies to build and deploy AI agents across channels rather than tying customer interactions to a specific platform or modality. The platform’s “AI Builds AI” feature can create and refine agentic workflows using documents, application programming interfaces and prior interaction data, he said.
During the question-and-answer session, Mohajer said implementations that previously required months of work and large professional-services teams can now be completed in minutes in some cases. The system can also identify missing information or capabilities after deployment and propose enhancements for human approval, he said.
The company cited healthcare as an area of particular traction. Mohajer said one top-20 healthcare provider quadrupled its spending during the quarter, while SoundHound added Champion Payer Solutions and either renewed or expanded relationships with five additional healthcare organizations. Hom said the company signed seven healthcare deals during the quarter, including one seven-figure agreement.
In financial services, SoundHound said it renewed or expanded contracts with two of the world’s seven largest banking institutions and one large global insurer. The company also cited new and expanded business with organizations including Rakuten Securities, a global asset-management firm and a Canadian-headquartered financial-services company.
In restaurants, the company said its Smart Answering offering for small and midsize businesses more than doubled year over year. It signed three major U.S. restaurant chains during the quarter and reported 100% renewal rates among key restaurant accounts. Mohajer said restaurant deployments are also creating cross-selling opportunities for IT help desk and guest-relations services through OASYS.
Automotive, Voice Commerce and In-House Models SoundHound continued to expand in Asia, particularly in China’s automotive market. The company signed a seven-figure agreement with a large infotainment software company for agentic AI solutions and an IoT agreement with an automotive maintenance and diagnostics company. It also signed a six-figure unit expansion with Indian two-wheeler company Ultraviolette and reached an agreement with another OEM to deploy real-time generative AI features in vehicles in India.
Elsewhere, SoundHound said Stellantis expanded unit adoption in Europe and added live generative AI capabilities, while Hyundai is adding generative AI enhancements in the U.S., Latin America and India.
The company also outlined upcoming voice-commerce initiatives. In the third quarter, it plans to begin piloting direct in-vehicle transactions with an unnamed automotive brand through a recently signed contract. Later this year, it expects to launch with a global electronics manufacturer that will use its technology to enable retail and restaurant purchases through television screens in U.S. homes.
Mohajer said SoundHound is investing in its proprietary Polaris speech foundation model, specialized large language models and speech-synthesis technology. Smaller customers are now operating entirely on SoundHound’s own technology stack, he said, and the company is preparing to deploy the stack with one of its largest healthcare customers after seeing improvements in accuracy and latency.
LivePerson Transaction Advances SoundHound said it has received key regulatory clearances for its planned acquisition of LivePerson and continues to expect the deal to close before year-end. Mohajer said the transaction would broaden the company’s conversational AI footprint to include 25 Fortune 100 brands and expand its enterprise customer base.
Management said its prior outlook of at least $350 million to $400 million in revenue next year remains unchanged, assuming the LivePerson transaction closes in the second half of 2026. The company did not provide a separate estimate for LivePerson’s contribution this year.
Mohajer said LivePerson’s digital customer-service offerings would complement SoundHound’s voice capabilities. He described opportunities to upgrade LivePerson customers to OASYS and to offer voice services to customers that have historically used LivePerson primarily for web chat and digital interactions.
“All the new customers we expect will utilize OASYS,” Mohajer said, while noting that existing customers will transition from legacy platforms at a pace with which they are comfortable.
About SoundHound AI (NASDAQ:SOUN) SoundHound AI, Inc is a voice AI and conversational intelligence company specializing in speech recognition, natural language understanding and sound identification technologies. Founded in 2005 and headquartered in Santa Clara, California, the company initially gained recognition with its music discovery app before pivoting to enterprise-grade voice AI solutions. Over the years, SoundHound AI has built a comprehensive platform that enables developers and businesses to embed conversational intelligence into a wide range of products and services.
The company’s core offering is the Houndify voice AI platform, which provides customizable speech-to-meaning technology, domain-specific natural language understanding and text-to-speech capabilities.
2 AI Stocks That Could Benefit as AI Moves Beyond the Data CenterSoundHound AI NASDAQ: SOUN reported record second-quarter revenue of $61.9 million, up 45% from a year earlier and 40% sequentially, as the company cited demand for its conversational and agentic AI offerings across healthcare, financial services, automotive, restaurants and other industries.
Chief Executive Officer and Co-Founder Keyvan Mohajer said the quarter was the company’s largest to date, with improvements in gross margin, adjusted EBITDA and earnings per share both year over year and sequentially. He attributed a significant portion of the performance to OASYS, the self-learning agentic AI platform SoundHound launched publicly in May.
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Investors Abandoned These 3 AI Stocks Too Early, Says Jeff Clark“Our results were beyond our own expectations,” Mohajer said, adding that OASYS has helped the company win demonstrations, requests for proposals, pilots and production deployments. He said SoundHound recently signed an eight-figure commitment less than 90 days after an initial demonstration.
Financial Results and Raised Outlook Chief Financial Officer and Co-Founder James Hom said growth was broad-based, led by enterprise AI and supported by healthcare, financial services, technology and automotive. SoundHound’s enterprise AI business remained its largest revenue contributor, while its automotive operations in Asia posted substantial growth for a fifth consecutive quarter, according to Hom.
Revenue totaled $61.9 million, up 45% year over year. GAAP gross margin was 45%, up six percentage points from the prior-year quarter. Non-GAAP gross margin was 58%, flat year over year and up eight percentage points sequentially. GAAP operating loss was $43.3 million, an improvement of 45% from a year earlier. Adjusted EBITDA loss was $9.6 million, improving 33% year over year. GAAP net loss was $42.8 million, or $0.10 per share. Non-GAAP net loss was $9 million, or $0.02 per share. Cash and equivalents totaled $203 million at quarter-end, with no debt. SoundHound’s Bottom Is In—Inflection and 50% Upside Ahead?Hom said the company has been working to improve efficiency through infrastructure modernization, cloud-spending optimization, legacy-system consolidation, adoption of in-house technology and acquisition synergies. Acquisitions have temporarily weighed on gross margin, he said, but the company expects margins to exceed 70% in the future, similar to levels when it became public.
SoundHound raised its full-year revenue outlook to a range of $230 million to $260 million, reflecting its first-half performance and continuing demand. The outlook does not include the planned acquisition of LivePerson because the timing of the transaction’s closing remains uncertain.
OASYS Adoption Across Verticals Mohajer said OASYS is designed to enable companies to build and deploy AI agents across channels rather than tying customer interactions to a specific platform or modality. The platform’s “AI Builds AI” feature can create and refine agentic workflows using documents, application programming interfaces and prior interaction data, he said.
During the question-and-answer session, Mohajer said implementations that previously required months of work and large professional-services teams can now be completed in minutes in some cases. The system can also identify missing information or capabilities after deployment and propose enhancements for human approval, he said.
The company cited healthcare as an area of particular traction. Mohajer said one top-20 healthcare provider quadrupled its spending during the quarter, while SoundHound added Champion Payer Solutions and either renewed or expanded relationships with five additional healthcare organizations. Hom said the company signed seven healthcare deals during the quarter, including one seven-figure agreement.
In financial services, SoundHound said it renewed or expanded contracts with two of the world’s seven largest banking institutions and one large global insurer. The company also cited new and expanded business with organizations including Rakuten Securities, a global asset-management firm and a Canadian-headquartered financial-services company.
In restaurants, the company said its Smart Answering offering for small and midsize businesses more than doubled year over year. It signed three major U.S. restaurant chains during the quarter and reported 100% renewal rates among key restaurant accounts. Mohajer said restaurant deployments are also creating cross-selling opportunities for IT help desk and guest-relations services through OASYS.
Automotive, Voice Commerce and In-House Models SoundHound continued to expand in Asia, particularly in China’s automotive market. The company signed a seven-figure agreement with a large infotainment software company for agentic AI solutions and an IoT agreement with an automotive maintenance and diagnostics company. It also signed a six-figure unit expansion with Indian two-wheeler company Ultraviolette and reached an agreement with another OEM to deploy real-time generative AI features in vehicles in India.
Elsewhere, SoundHound said Stellantis expanded unit adoption in Europe and added live generative AI capabilities, while Hyundai is adding generative AI enhancements in the U.S., Latin America and India.
The company also outlined upcoming voice-commerce initiatives. In the third quarter, it plans to begin piloting direct in-vehicle transactions with an unnamed automotive brand through a recently signed contract. Later this year, it expects to launch with a global electronics manufacturer that will use its technology to enable retail and restaurant purchases through television screens in U.S. homes.
Mohajer said SoundHound is investing in its proprietary Polaris speech foundation model, specialized large language models and speech-synthesis technology. Smaller customers are now operating entirely on SoundHound’s own technology stack, he said, and the company is preparing to deploy the stack with one of its largest healthcare customers after seeing improvements in accuracy and latency.
LivePerson Transaction Advances SoundHound said it has received key regulatory clearances for its planned acquisition of LivePerson and continues to expect the deal to close before year-end. Mohajer said the transaction would broaden the company’s conversational AI footprint to include 25 Fortune 100 brands and expand its enterprise customer base.
Management said its prior outlook of at least $350 million to $400 million in revenue next year remains unchanged, assuming the LivePerson transaction closes in the second half of 2026. The company did not provide a separate estimate for LivePerson’s contribution this year.
Mohajer said LivePerson’s digital customer-service offerings would complement SoundHound’s voice capabilities. He described opportunities to upgrade LivePerson customers to OASYS and to offer voice services to customers that have historically used LivePerson primarily for web chat and digital interactions.
“All the new customers we expect will utilize OASYS,” Mohajer said, while noting that existing customers will transition from legacy platforms at a pace with which they are comfortable.
About SoundHound AI (NASDAQ:SOUN)SoundHound AI, Inc is a voice AI and conversational intelligence company specializing in speech recognition, natural language understanding and sound identification technologies. Founded in 2005 and headquartered in Santa Clara, California, the company initially gained recognition with its music discovery app before pivoting to enterprise-grade voice AI solutions. Over the years, SoundHound AI has built a comprehensive platform that enables developers and businesses to embed conversational intelligence into a wide range of products and services.
The company's core offering is the Houndify voice AI platform, which provides customizable speech-to-meaning technology, domain-specific natural language understanding and text-to-speech capabilities.
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