U.S. stock markets on March 12 rebounded a bit from a brutal two-day selloff, driven by calmer-than-expected inflation data and resurgent technology stocks.
The S&P 500 rose 0.5% and the Nasdaq Composite advanced 1.2%.
Among the notable tech stocks was SoundHound AI, which gained 6.9% on the day, benefiting from the tech-sector rally.
But that move up didn’t erase the company’s sharp decline during the recent selloff in AI stocks, which began after Nvidia’s Q4 report and fueled investor doubts about growth in AI-related sectors.
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SoundHound AI, a stock previously backed by Nvidia, plunged more than 34% in the past month and nearly 54% year-to-date. Contrast that market move with the stock’s 9-times surge in 2024 on AI enthusiasm.
SoundHound stock is down nearly 54% year-to-date.
What happened to SoundHound AI?
SoundHound AI (SOUN) has been one of the hottest names in voice AI. The Santa Clara, Calif., company partners with automakers and restaurants to power their voice-assistance technology.
A year ago Nvidia (NVDA) disclosed an investment of $3.7 million in SoundHound. But in February the AI-chip giant disclosed in a Securities and Exchange Commission Form 13-F that it had sold all its shares of SoundHound.
This prompted investors to push SoundHound 28% lower on Feb. 14, after the filing.
Two weeks later, on Feb. 27, the company reported a strong fourth-quarter performance, which led to a 17% stock-price rally in the following session.
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The company reported a loss of 5 cents a share for the quarter, better than Wall Street’s consensus estimate of an 8-cent loss. Revenue came in at $34.5 million, surpassing expectations of $33.7 million.
“We had a breakthrough year, expanding our leadership position in voice and conversational AI through major customer wins, expanded partnerships, groundbreaking generative AI innovation, and strategic acquisitions,” Chief Executive Keyvan Mohajer said in a statement.
For all of 2025, SoundHound raised its revenue outlook to a range of $157 million to $177 million from its previous forecast of $155 million to $175 million. The new guidance bracketed the Wall Street consensus estimate of $165.27 million.
On March 4 SoundHound said it would delay filing its annual report, citing the “complexity of accounting” for two acquisitions it made last year. While the company expected to submit the report by March 18, it ultimately filed it a week earlier, on March 11.
SoundHound disclosed on March 12 that CEO Mohajer had adopted a plan to sell up to $27 million of shares, Barron’s reported.
Analyst still bullish on SoundHound
Wedbush analyst Dan Ives reiterated an outperform rating and $22 price target on SoundHound shares.
Ives saw no significant changes to revenue or costs after SOUN filed its 10-K, even as bearish investors made noise about the routine delay.
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SoundHound “continues to see strong demand heading into [2025] as the company looks to diversify its customer base by adding more use cases into its horizontal platform,” Ives said in a research report.
He added that SoundHound remains “an underappreciated AI-derivative play that is making significant strides across the landscape.”
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