SoundHound Retail Traders Brace For More Stock Gains After Voice AI Player Reports ‘Strongest-Ever Quarter’

The company’s Q2 revenue soared 217% year-over-year to $42.68 million, sharply higher than the $32.9-million consensus estimate.

SoundHound stock was the top-trending equity ticker on Stocktwits late Thursday as retail investors reacted to the conversational artificial intelligence (AI) company announcing a beat-and-raise quarter.

Retail sentiment toward the SoundHound stock turned to ‘extremely bullish’ (88/100) by late Thursday from ‘neutral’ a day ago. The message volume also picked up pace to ‘extremely high’ levels. 

The 24-hour message volume change leading up to late Thursday was about 500%.

Santa Clara, California-based SoundHound reported a loss of $0.03 per share on an adjusted basis for the second quarter of the fiscal year 2025, narrower than the year-ago loss of $0.04 and the Factset-compiled consensus of $0.05 per share.

Revenue climbed 217% year-over-year to $42.68 million, sharply higher than the $32.9-million consensus estimate.

Co-founder and CEO Keyvan Mohajer said, “In SoundHound’s strongest ever quarter, many of our previous strategic moves delivered high-impact results with growth across every business unit.”

“We realized significant new wins as well as cross-sell deals, demonstrating the incredible opportunity we predicted with our 2024 acquisitions.”

SoundHound ended the quarter with cash and cash equivalents of $230 million as of June 30 and boasted of no debt on its balance sheet.

The company raised its full-year revenue outlook to a range of $160 million to $178 million from a range of $157 million to $177 million.

Underlining the massive potential for conversational AI, Mark Zuckerberg’s Meta Platforms Inc. made its second voice AI startup acquisition, WaveForms, according to a report by The Information, just a month after purchasing PlayAI.

Commenting on Stocktwits, a bullish watcher noted that a majority of the volume in SoundHound stock over the past week was from dark pool or off-exchange transactions. They also noted that the short interest was high, which they considered a positive for the underlying stock.

The short interest in the stock is currently at 30.32%, according to Koyfing, and it has remained above this level since late May.

Another user considered the stock price to be too low, noting that it was trading at double the current levels at the start of the year and that the earnings report indicated the company was performing well.

SoundHound stock has grossly underperformed the broader market, having lost 46% this year. In overnight trading, the stock was up over 14%, and if gains carry over into Friday’s session, it would mark its best session since late May, according to Koyfin data.

The Koyfin-compiled average analysts’ price target for the stock is $11.81, implying upside potential of over 10%.

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