SOUN Stock Soars 25% on Breakthrough AI Deal—Is It Time to Buy?

Shares of SoundHound AI Inc. (NASDAQ: SOUN) are back in the spotlight after a volatile May that mixed disappointing earnings, a looming shareholder lawsuit, and renewed chatter around artificial-intelligence stocks. Below is what investors need to know as the headline risk builds ahead of summer trading. SOUN’s post-earnings slide On May 8 the voice-AI specialist posted first-quarter revenue of just $7.6 million, missing Wall Street estimates and sending the stock down more than 8 percent the next day. Management blamed slower enterprise contract timing but reaffirmed its full-year outlook, insisting automotive voice-assistant demand remains robust. Legal clouds gather Separately, multiple law firms have filed class-action complaints alleging SoundHound misled investors about growth prospects. The current lead-plaintiff deadline is May 27 2025. Another notice urges shareholders who bought stock between May 2023 and February 2025 to contact attorneys at Levi & Korsinsky before that same date. Lawsuit headlines often spark short-term volatility as traders price in potential settlement costs and management distraction. Balance-sheet snapshot At quarter-end SoundHound reported $226 million in total cash, bolstered by a February follow-on share offering that raised roughly $150 million. Net loss narrowed to $17 million from $22 million a year earlier, helped by cost-cutting in sales and marketing. The company guides to break-even adjusted EBITDA by the second half of 2026, though skeptics argue that target may slip if litigation expenses pile up. Price action and technical picture After touching an all-time high of $12.92 in March, SOUN has retreated to the mid-$9 range. The shares eked out a 0.3 percent gain in the last trading session, closing at $9.58 on May 23. The 50-day moving average near $9.40 is the first support zone; below that, chart watchers point to $8.75—April’s consolidation low—as a line in the sand. A break back above $10.50 would keep the uptrend from January intact. Key catalysts to watch • Court rulings or settlements tied to the pending class action • Major new OEM wins in automotive voice assistants • Visibility on the company’s “inference-at-the-edge” chip partnership road map • Q2 earnings release, tentatively scheduled for early August, where investors will seek confirmation of 2025 revenue guidance between $60 million and $77 million Analyst sentiment and price targets Six covering analysts maintain an average 12-month target of $10.83—about 13 percent upside from current levels—while the highest bull case sits at $18. Bears caution that the multiple (10× projected 2025 sales) leaves little room for further missteps, especially as large-cap AI competitors fight for enterprise voice-assistant contracts. Bottom line SOUN stock remains a high-beta play on the broader AI theme, offering both outsized opportunity and headline-driven risk. Traders focused on momentum will be watching whether the lawsuit deadline acts as a clearing event, while long-term investors will want evidence that revenue acceleration can outpace legal and dilution overhangs.