This has turned out to be a remarkable year for SoundHound AI (NASDAQ: SOUN) investors as shares of the artificial intelligence (AI) voice solutions company have shot up a remarkable 272% as of this writing.
The stock’s stunning rally, however, has not been entirely driven by its impressive financial performance. SoundHound shot up early in the year after it emerged that AI pioneer Nvidia had taken on a small stake in the company. And it is also worth noting the stock has witnessed huge swings throughout the year.
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Investors, therefore, may be wondering if this high-flying AI stock can sustain its red-hot momentum in 2025 as well. Let’s take a look at recent developments at SoundHound and try to predict how the stock may perform over the next 12 months.
The demand for SoundHound’s voice AI solutions has been increasing at a healthy pace — revenue in the first nine months of 2024 increased 74% year over year to just over $50 million. Management is guiding for full-year revenue of $82 million to $85 million.
Assuming SoundHound does hit the midpoint of its guidance, its top-line growth for the year would reach 82%, up significantly from the 47% growth it delivered in 2023. What’s more, the company believes it will become profitable on an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) basis by the end of 2025. For context, it posted an adjusted EBITDA loss of $15.9 million in Q3 2024.
SoundHound’s eye-popping growth can be attributed to the rapid adoption of its voice AI offerings. It offers several voice-based AI solutions to customers, including automatic speech recognition, natural language understanding, and text-to-speech, among others. The company has already built a solid customer base across multiple industry verticals such as automotive, restaurants, the Internet of Things (IoT), and smart devices.
For example, the likes of Hyundai, Stellantis, Honda, and Kia are using SoundHound’s voice AI technology in their cars, while Qualcomm and Motorola are deploying its tech in smartphones. Restaurant chains use SoundHound’s solutions for online ordering and customer service.
And now, with the recent acquisition of enterprise AI software provider Amelia, SoundHound is expanding its presence in the customer service space, where the demand for voice-based AI solutions is increasing at a nice clip. It is stimated the adoption of AI in this space could grow at a nearly 24% annual pace over the next five years, generating annual revenue of $1.38 billion at the end of the forecast period.
