# SoundHound AI: A Look at Its Promising Future
This year has truly been something special for SoundHound AI (NASDAQ: SOUN) investors, with shares soaring an astounding 272% so far. While much of this surge is linked to positive buzz in the AI sector, particularly following Nvidia’s investment in the company, the stock has experienced its fair share of volatility throughout 2024.
As we approach 2025, many are left wondering: can SoundHound maintain this impressive momentum? Let’s dive deeper into the recent advancements at SoundHound and explore the potential trajectory for the next year.
## Strong Growth Ahead for SoundHound AI
The appetite for SoundHound’s innovative voice AI solutions is skyrocketing. In the first nine months of 2024, the company reported a 74% year-over-year revenue increase, surpassing $50 million. Management anticipates total revenue between $82 million and $85 million for the year, which would mean an impressive growth leap of 82%, a noteworthy rise from the 47% growth seen in 2023.
Looking ahead, SoundHound is on track to achieve profitability, expecting to be adjusted EBITDA positive by the end of 2025, following a Q3 2024 adjusted EBITDA loss of $15.9 million.
The secret sauce behind SoundHound’s remarkable growth lies in the rapid adoption of its voice AI technology. The company provides various voice-based AI tools, including automatic speech recognition and natural language understanding, to clients across industries like automotive, restaurants, and smart devices. Names like Hyundai, Honda, and Kia are already leveraging SoundHound’s tech in cars, while Qualcomm and Motorola integrate its solutions into smartphones. Restaurants, too, are using SoundHound for everything from online orders to enhancing customer service.
Recently, the company made a significant move by acquiring Amelia, an enterprise AI software provider. This acquisition aims to enhance SoundHound’s footprint in customer service, which is experiencing a robust growth trajectory of nearly 24% annually over the next five years, projected to generate around $1.38 billion by 2029.
Despite the $80 million investment in Amelia, SoundHound expects to rake in $45 million in recurring revenue from this deal next year alone. This acquisition positions SoundHound to potentially generate between $155 million and $175 million in revenue for 2025—almost double this year’s forecast—indicating that growth may continue to accelerate.
## Can SoundHound Sustain Its Upward Trend?
While the company’s management remains optimistic, analysts covering SoundHound have set a modest median 12-month price target of $8.50 for the stock. This represents only an 8% increase based on current trading prices. The cautious outlook stems from the fact that SoundHound currently trades at a hefty 36 times its sales, indicating the market has likely already priced in much of the expected growth.
To drive substantial price increases, SoundHound will need to consistently surpass market expectations over the next year. Given its impressive performance so far, investing in SoundHound AI could appeal primarily to those with a high-risk tolerance or a long-term investment perspective.
## Is SoundHound AI a Good Investment Right Now?
Before you decide to invest in SoundHound AI, consider this: the Motley Fool Stock Advisor team recently highlighted what they believe are the top 10 stocks to buy right now, and SoundHound AI isn’t on that list. Their selected stocks have a history of yielding substantial returns for investors.
For instance, if you had invested $1,000 in Nvidia when it made their list back in April 2005, your investment would have grown to a whopping $829,378. Stock Advisor has notably outperformed the S&P 500 since its inception in 2002.
In conclusion, while SoundHound AI presents intriguing growth opportunities, potential investors should weigh these prospects against their risk tolerance and investment strategies.
The AI Buzz Hub team is excited to see where these breakthroughs take us. Want to stay in the loop on all things AI? Subscribe to our newsletter or share this article with your fellow enthusiasts.
