SoundHound AI Inc. (SOUN) stock plummeted 5.09% in Monday's intraday trading session, closing at $20.62 per share. The artificial intelligence company's stock experienced a significant decline despite a strong performance in 2024, raising concerns about its lofty valuation.
According to analysts, SoundHound AI's impressive growth prospects and widespread adoption across various industries, including automotive, restaurant, and banking sectors, fueled the stock's remarkable 836% surge in 2024. However, the company's current valuation, trading at around 90 times its sales, has raised eyebrows, with some investors questioning whether the stock's price has already priced in its future success.
While SoundHound AI's management projects massive revenue growth for 2025, ranging between $155 million and $175 million, nearly doubling the previous year's guidance, analysts remain skeptical about the company's ability to sustain such rapid growth over the long term. Wall Street analysts estimate SoundHound AI's 2026 revenue to be around $202 million, significantly lower than the expectations required to justify its current valuation.