Optimism is returning to the market as U.S.-China trade tensions ease, helping to calm fears of a global economic slowdown and injecting momentum into growth stocks like SoundHound (SOUN). Adding to the positives, the voice AI company’s stellar Q1 sales growth and growing addressable market further boosted its share price.

In fact, SoundHound stock staged an impressive comeback from its April 7 low of $6.52, rallying to a recent high of $12.65 by May 14.

However, the stock is losing steam and is now trading below $10. Shares have dropped 50.3% in the year-to-date.  

With SoundHound stock losing significant value, is it a bargain buy now?

SoundHound’s Long-Term Potential Remains Intact

SoundHound is tapping into the fast-growing voice AI market, and its Q1 results suggest it has solid secular momentum behind its growth. While the stock will remain sensitive to macroeconomic uncertainty, its long-term fundamentals remain solid.

Kicking off 2025 with a strong showing, SoundHound reported first-quarter revenue of $29.1 million, a 151% increase compared to the same period last year. Although the company’s top line came in slightly below Wall Street expectations, the strong revenue growth shows that the demand for SoundHound’s offerings remains solid. Moreover, the voice AI company’s top-line growth rate has accelerated quarter after quarter. This trajectory reflects the increasing adoption of voice-enabled AI solutions across industries.

Crucially, SoundHound’s growth is not dependent on a handful of large clients. In fact, no single customer accounted for more than 10% of revenue in Q1, a sign that the company is diversifying its customer base. This kind of spread helps reduce risk and signals growing market acceptance of its products across multiple sectors.

SoundHound is also accelerating its growth and capturing market share through strategic acquisitions. Over the past year, SoundHound has acquired SYNQ3, Allset, and Amelia. These acquisitions enhance its core capabilities and expand its total addressable market (TAM). These investments are already yielding returns. The integration of SYNQ3 led to a 30% increase in location count, improved upselling, and widespread adoption of SoundHound’s flagship Polaris platform. Polaris is a SoundHound’s multilingual, multimodal AI system.

SoundHound’s move into the automotive space has also picked up speed, thanks in part to its acquisition of Allset. Meanwhile, the integration of Amelia has expanded its opportunities into new industries, unlocking additional channels for growth through upselling and cross-selling.

The company’s core platforms, including generative AI, voice AI, and agentic systems, are gaining ground. Bookings are growing at a healthy double-digit rate, and usage of its cloud-based AI services surged by more than 50%. These are signs of strong and sustained demand.

Even amid broader macroeconomic uncertainty, SoundHound benefited from higher average selling price (ASP) in the automotive market. The increased penetration of its AI technology, particularly generative AI, is driving ASP. The company has established a robust pipeline of new partnerships with automotive original equipment manufacturers (OEMs), indicating that demand for its voice-driven solutions remains strong.

All in all, SoundHound is well-positioned in a rapidly growing voice AI market. Its expanding TAM and solid sales pipeline indicate that the long-term outlook for SoundHound remains positive. However, short-term fluctuations may occur due to market uncertainties.

Is SoundHound Stock a Bargain Buy or Still Overpriced?

SoundHound has strong growth potential in the expanding voice AI market. The company’s technology and partnerships position it well for future expansion. However, the stock is not cheap on the valuation front. Currently trading at a price-sales ratio of 47.53x, SOUN stock appears expensive.

With ongoing macroeconomic uncertainty, Wall Street remains cautiously optimistic. Reflecting this sentiment, analysts have a “Moderate Buy” consensus rating on SOUN stock.

Conclusion

SoundHound’s solid fundamentals, accelerating revenue growth, and expanding footprint in the voice AI space point to a promising long-term trajectory. Moreover, strategic acquisitions, a diversified customer base, and rising demand for AI-driven solutions all strengthen its competitive positioning. However, with the stock still trading at a premium valuation and broader market headwinds in play, only those with a high risk appetite and long-term view should consider adding SOUN stock under $10.