Soundhound fuels 2024 surge into 2025 with new AI voice offerings: Wedbush

SoundHound AI (NASDAQ:SOUN) shares have surged in late 2024, climbing nearly 160% in the past month alone, and Wedbush believes the artificial intelligence voice platform is poised for more growth in 2025.

“As the company has focused on retaining a strong balance sheet to fuel its growth initiatives, SOUN has recently turned to an aggressive but accretive M&A strategy with three acquisitions over the past 18 months (Amelia, SYNQ3, Allset) to expand its reach to more opportunities for voice AI solutions,” said Wedbush analysts, led by Daniel Ives, in an investor note.

Soundhound remains in the early stages of capitalizing on enterprise AI spending, with its chat AI use cases being utilized by a growing number of restaurants and the automotive industry. Wedbush expects the reach to extend as Soundhound pushes into the voice AI e-commerce market in 2025.

“The company continues to leverage its partnership with Nvidia (NVDA) to bring voice generative AI to the edge without cloud connectivity, which will be demoed at CES 2025 pointing to continued improvement of its tech stack while looking to launch the third pillar (voice commerce ecosystem) of its growth strategy in 2025,” Ives added.

Wedbush maintains its Outperform rating on the stock and increases its price target to $22 from $10.

“The company’s EV/Sales ratio of nearly 72 is almost 2000% higher than the sector median of 3.45,” said Weebler Finance, in an analysis of the stock last week.

“While the valuation suggests a massive discrepancy from normal levels in the sector, the growth too is relatively also quite extraordinary,” Weebler Finance added. “For instance, while the median forward revenue growth is 5.6% for the sector, SOUN boasts a forward growth rate on the topline of over 74%. That is an over 1200% difference. When considering how SoundHound AI is a disruptive play leading a generational shift, we see that the long-term prospects are even more promising, suggesting that the stock is priced for some substantial growth ahead.”