SoundHound AI (NASDAQ:SOUN) Shares Down 4.3% – Here’s Why

Shares of SoundHound AI, Inc. (NASDAQ:SOUN) traded down 4.3% during trading on Friday . The stock traded as low as $8.53 and last traded at $8.5970. 46,808,717 shares were traded during mid-day trading, an increase of 71% from the average session volume of 27,440,648 shares. The stock had previously closed at $8.98.

Key Headlines Impacting SoundHound AI

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

• Positive Sentiment: Revenue beat and strong growth — Q4 revenue rose ~59% year‑over‑year to $55.06M, topping Street estimates and contributing to record annual revenue of $169M. This headline growth is the primary bullish driver for the stock. GlobeNewswire: Press Release
• Positive Sentiment: Strong cash position — company reported ending the quarter with about $248M in cash, supporting execution of product rollouts and R&D as it scales agentic AI for enterprise customers. Benzinga: Cash / Results
• Positive Sentiment: Product and expansion catalysts — company launched a “Sales Assist” retail voice agent and opened a new innovation hub in Bengaluru to accelerate agentic AI development, moves that expand TAM and execution capacity. Yahoo Finance: Bengaluru hub
• Neutral Sentiment: EPS and margins — reported EPS roughly in line with consensus (company reported ($0.02) EPS / in‑line with estimates), while GAAP and non‑GAAP losses persist; investors interpreted the EPS print as neither a clear beat nor a cure for ongoing profitability concerns. Zacks: Q4 recap
• Negative Sentiment: Analyst reaction: Piper Sandler cut its price target to $9 (from $11) and kept a “neutral” rating — the lower target and lack of an upgrade reduce near‑term upside expectations and likely weighed on the stock. Benzinga / TickerReport: Piper Sandler update
• Negative Sentiment: Profitability & guidance ambiguity — despite revenue beats, the company still reports negative margins and a FY‑2026 revenue guide range ($225M–$260M) that leaves room for investor concern vs. consensus; rising expenses and continued losses keep sentiment cautious. Company: Q4 presentation / press release

Analyst Ratings Changes

Several brokerages have recently issued reports on SOUN. Zacks Research upgraded SoundHound AI from a “strong sell” rating to a “hold” rating in a research note on Monday, February 9th. Piper Sandler restated a “neutral” rating and set a $9.00 price target (down from $11.00) on shares of SoundHound AI in a report on Friday. LADENBURG THALM/SH SH raised SoundHound AI to a “strong-buy” rating in a research report on Thursday, December 18th. Cantor Fitzgerald upgraded SoundHound AI from a “neutral” rating to an “overweight” rating and lifted their price objective for the company from $13.00 to $15.00 in a research note on Friday, December 12th. Finally, Weiss Ratings restated a “sell (d-)” rating on shares of SoundHound AI in a research note on Friday, January 9th. One analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating, three have issued a Hold rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat.com, SoundHound AI presently has an average rating of “Moderate Buy” and an average target price of $15.79.

SoundHound AI Stock Performance

The firm has a market cap of $3.61 billion, a price-to-earnings ratio of -171.91 and a beta of 2.64. The firm has a 50-day moving average price of $9.58 and a two-hundred day moving average price of $12.91.

SoundHound AI (NASDAQ:SOUN) last announced its quarterly earnings results on Thursday, February 26th. The company reported ($0.02) earnings per share (EPS) for the quarter, meeting analysts’ consensus estimates of ($0.02). SoundHound AI had a negative return on equity of 3.82% and a negative net margin of 8.71%.The firm had revenue of $55.06 million during the quarter, compared to the consensus estimate of $53.88 million. During the same period in the prior year, the company posted ($0.05) earnings per share. The firm’s quarterly revenue was up 59.4% compared to the same quarter last year. Research analysts anticipate that SoundHound AI, Inc. will post -0.38 earnings per share for the current year.

Insider Transactions at SoundHound AI

In other SoundHound AI news, COO Michael Zagorsek sold 73,406 shares of the firm’s stock in a transaction dated Monday, December 22nd. The stock was sold at an average price of $11.28, for a total transaction of $828,019.68. Following the transaction, the chief operating officer owned 1,787,459 shares of the company’s stock, valued at approximately $20,162,537.52. This trade represents a 3.94% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, SVP Majid Emami sold 42,600 shares of the business’s stock in a transaction dated Monday, December 22nd. The shares were sold at an average price of $11.28, for a total value of $480,528.00. Following the completion of the sale, the senior vice president directly owned 565,586 shares of the company’s stock, valued at $6,379,810.08. The trade was a 7.00% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last three months, insiders sold 460,922 shares of company stock worth $5,199,073. Insiders own 9.17% of the company’s stock.

Institutional Inflows and Outflows

Hedge funds have recently added to or reduced their stakes in the company. Vanguard Group Inc. lifted its stake in SoundHound AI by 4.4% in the fourth quarter. Vanguard Group Inc. now owns 45,367,437 shares of the company’s stock valued at $452,313,000 after buying an additional 1,909,868 shares during the last quarter. Geode Capital Management LLC increased its holdings in shares of SoundHound AI by 3.1% in the 4th quarter. Geode Capital Management LLC now owns 9,180,321 shares of the company’s stock valued at $91,543,000 after acquiring an additional 273,097 shares during the period. Morgan Stanley increased its holdings in shares of SoundHound AI by 48.1% in the 4th quarter. Morgan Stanley now owns 8,987,522 shares of the company’s stock valued at $89,606,000 after acquiring an additional 2,917,280 shares during the period. State Street Corp raised its position in SoundHound AI by 0.9% in the 4th quarter. State Street Corp now owns 8,691,235 shares of the company’s stock valued at $86,652,000 after purchasing an additional 80,908 shares during the last quarter. Finally, UBS Group AG boosted its stake in SoundHound AI by 77.6% during the 4th quarter. UBS Group AG now owns 6,124,283 shares of the company’s stock worth $61,059,000 after purchasing an additional 2,676,707 shares during the period. Hedge funds and other institutional investors own 19.28% of the company’s stock.

About SoundHound AI

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.