‘Proceed With Caution’: Top Investor Not So Hot on SoundHound Stock

SoundHound AI (NASDAQ:SOUN) just can’t seem to catch a break this year, dropping downward by some 27%. The company’s revenues are growing, and yet the narrative around the AI voice platform remains mired in EBITDA losses and worries about the future of AI software stocks.

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And yet, not all the news is bad. In fact, SoundHound’s Q4 2025 revenue was $55.1 million, a significant increase of 59% from the previous year. The company also closed a record number of customer deals, according to CEO Keyvan Mohajer, and its operations span numerous industries and sectors.

The bottom line also experienced improvement, as the company’s GAAP gross margin improved to 48% and adjusted EBITDA loss reached -$7.4M (an improvement of 56% year-over-year).

“All key profit metrics were up,” boasted Mohajer. Company management is targeting long-term >70% gross margins and >30% EBIT margins.

And yet, SOUN’s share price has fallen another 17% in the weeks since the company reported its Q4 and full-year 2025 numbers. What’s going on?

Top investor Reuben Gregg Brewer thinks he knows the answer to this conundrum.

“There’s just one wrinkle in the mix that you shouldn’t ignore. The company isn’t profitable, so it is still a money-losing technology start-up,” explains the 5-star investor, who is among the top 1% of stock pros covered by TipRanks.

Brewer certainly appreciates the company’s improving revenues, acknowledging that SoundHound is enjoying a “very rapid sales increase.” The company basically doubled its revenues between 2024 and 2025.

Still, for the investor, these top-line growth figures aren’t enough to mask the fact that SOUN is continuing to “bleed red ink.” Moreover, the investor is worried that the rapid pace of AI development could make SoundHound’s offerings no longer all that special.

“With the rapid development of AI, it may not be able to differentiate its products for much longer,” he adds.

For that reason, despite the fact that SOUN is down some two-thirds from its 52-week high, Brewer thinks caution is the order of the day.

“More conservative investors should probably still be sitting on the sidelines here as the market for AI products continues to evolve,” concludes Brewer. (To watch Reuben Gregg Brewer’s track record, click here)

Wall Street appears to be throwing caution to the wind. With 5 Buys and 1 Hold, SOUN enjoys a Strong Buy consensus rating. Its 12-month average price target of $14.80 points to gains north of 100% going forward. (See SOUN stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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