When Siri debuted in 2011, she didn’t just answer questions — she started a conversation.
For the first time, an AI voice lived in our pockets, ready to set reminders, search the web and even crack a joke.
Then came Amazon's Alexa and Google Assistant, which turned smart speakers into household staples and embedded voice commands into everyday routines.
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But these assistants all shared a common limitation — they were tightly bound to tech giants' ecosystems. As companies scrambled to integrate voice technology into their products, many found themselves forced to give up control over branding and user data.
That’s where SoundHound AI (SOUN) saw an opportunity.
Born from its roots as a music-recognition app, the Santa Clara, Calif., company now focuses on white-label voice artificial intelligence that enables businesses to create custom voice assistants.
Its clients span industries, from Mercedes-Benz to IHG Hotels and Spotify.
The company is also partnering with AI-chip giant Nvidia. (NVDA) Earlier this year, SoundHound unveiled an in-vehicle voice assistant that uses a large language model powered by Nvidia’s Drive technology.
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Nvidia is also a backer of this company. In February 2024 Nvidia disclosed an investment of $3.7 million in SoundHound.
As of the end of Q3, Nvidia owned 1.7 million, or 0.5%, of SoundHound's shares outstanding.
SoundHound’s Q3 revenue surpassed expectations
The voice market is one of the fastest-growing sectors in AI. According to data from Grand View Research, it is projected to expand by nearly 30% annually from 2024 to 2030, the Motley Fool reported.
SoundHound's latest earnings report shows that its growth has outpaced this projection.
However, the company remains unprofitable and has not achieved positive cash flow.
In November, SoundHound reported record third-quarter revenue and raised its full-year revenue forecast.
The company reported an adjusted loss of 4 cents a share, beating the consensus estimate of a 7-cent loss. The company posted revenue of $25.1 million, surpassing expectations of $23 million.
In the year-earlier period, it lost 9 cents a share on revenue of $13.3 million.
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"This marks SoundHound's largest quarter to date as we begin expanding into key new verticals," SoundHound Chief Executive Keyvan Mohajer said in a statement.
"Our growing scale, coupled with strong market enthusiasm for conversational AI, allows us to advance our vision. We see voice as the 'killer app' for applied generative AI," Mohajer said.
For the full year, the company projected sales of $83.5 million at the midpoint of its guidance, surpassing analysts' expectations of $82.6 million.
Looking ahead to 2025, it forecast revenue of $165 million, above the consensus estimate of $152.1 million.
Analyst raises SoundHound price targets
Wedbush analyst Daniel Ives more than doubled the investment firm's price target on SoundHound to $22 from $10 and affirmed an outperform rating on the shares, thefly.com reported on Dec 16.
“SoundHound represents an underappreciated pure-play AI company that is taking significant strides in taking share across the landscape, with its enterprise AI software platform seeing continued strength,” the analyst said.
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The analyst cited continued demand for voice AI solutions, representing a potential $1 trillion opportunity over the coming years.
Of six analysts surveyed by TheStreet, four have a strong buy rating, and two have a hold rating for SoundHound.
SoundHound stock closed at $19.69 on Dec. 16. The stock is up 9 times year-to-date.
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