SoundHound AI: Riding the Wave of Conversational AI Amid Market Volatility

Buy this AI stock with more than 25% upside after a big decline, Piper Sandler says

SoundHound AI is a pure play in the rise of artificial intelligence that investors shouldn't overlook, according to Piper Sandler. The firm initiated coverage of the AI stock on Monday with an overweight rating and a $12 per share price target. Piper Sandler's forecast implies more than 25% upside from Friday's $9.58 close. "With its voice-A.I platform, SoundHound is a direct play on the A.I revolution," analyst James Fish wrote. The analyst highlighted a multitude of segments into which SoundHound can expand its growth runway, including further integrating its conversational AI technology into auto. SOUN YTD mountain SoundHound AI stock in 2025. "SoundHound's original enterprise use-case was mainly in autos. There are multiple underlying positives for SoundHound here: just 4% penetration vs. white space of +25%, winning new OEMs, increasing IoT [internet of things] devices, ASPs expanding, & domestic," the analyst said. "However, the auto-production slump (-1% Y/Y) and customer exposure (-4%) are creating challenges near-term." ""The $47B serviceable opportunity across use-cases by 2027E is very early still," Fish said. "Positively, we see a multi-headed A.I "monster" across QSRs & conversational A.I, early penetration in autos with increasing ASPs, leverage coming near to medium term given the business model transition & Amelia synergies, and a competitive advantage vs. even hyperscalers' voice offerings." SoundHound shares have taken a beating this year, losing more than half of their value. However, the stock has rallied nearly 18% in the second quarter and gained nearly 5% in the premarket. Only seven analysts cover the stock, per LSEG. Of those, four have a buy or strong buy rating while the remaining three rate it a hold. The average price target on SoundHound points to 23% upside.

SoundHound AI (SOUN) Stock Jumps 15%: What's Going On? - SoundHound AI (NASDAQ:SOUN)

Shares of SoundHound AI Inc SOUN surged as much as 15% Tuesday morning to $11.02, rebounding sharply after a brief sell-off last week, and despite a lack of company specific news for the session. Here's what investors need to know. What To Know: The renewed momentum comes despite SoundHound's mixed first-quarter earnings report on May 8. The voice AI specialist reported $29.13 million in revenue, missing estimates of $30.38 million. However, the company exceeded earnings expectations with an adjusted loss of 6 cents per share, beating forecasts by 3 cents. Revenue grew 151% year-over-year, driven by acquisitions and increasing demand from the automotive and restaurant industries. Read Also: Navitas Semiconductor Soars 146% On NVIDIA Partnership For AI Power Systems While gross margin dipped sequentially and adjusted EBITDA loss widened to $22.2 million, SoundHound maintained its 2025 revenue guidance of $157 million to $177 million. The company ended the quarter with $246 million in cash and no debt, signaling strong liquidity. Analysts highlighted the company's expanding customer base and robust pipeline. Despite trimming its price target to $18, H.C. Wainwright reaffirmed a Buy rating, citing long-term potential in SoundHound's proprietary AI platform and expanding market presence. Read Also: Trump's Tariffs May Trigger An Inflation Shock - But Not A Lasting One, Goldman Sachs Says How To Buy SOUN Stock By now you're likely curious about how to participate in the market for SoundHound AI - be it to purchase shares, or even attempt to bet against the company. Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy "fractional shares," which allows you to own portions of stock without buying an entire share. In the case of SoundHound AI, which is trading at $10.62 as of publishing time, $100 would buy you 9.42 shares of stock. If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to "go short" a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading - either way it allows you to profit off of the share price decline. According to data from Benzinga Pro, SOUN has a 52-week high of $24.98 and a 52-week low of $3.82. Image: Shutterstock SOUNSoundHound AI Inc$10.8012.8%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum95.44GrowthNot AvailableQualityNot AvailableValue7.39Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Prediction: SoundHound AI Stock Will Beat the Market. Here's Why. | The Motley Fool

It has been just over four years since SoundHound AI (SOUN 0.36%) made its stock market debut, and the voice artificial intelligence (AI) company's returns have been disappointing thus far, as it has gained just 28% during this period, as compared to the 45% gains clocked by the tech-heavy Nasdaq Composite. What's worth noting is that wild stock price swings have been a common characteristic of SoundHound's journey on the market as a public company. The stock had a forgettable 2022 after its stock market listing, followed by a massive 1,000% jump in 2023 and 2024. This year, however, is turning out to be another woeful one for SoundHound investors, as the stock has lost nearly 52% of its value as of this writing. The good part is that SoundHound seems capable of going on a bull run once again, replicating the impressive gains it clocked in 2023 and 2024 that were big enough to help it crush the broader market's returns. Let's look at the reasons why SoundHound stock could go on a market-beating run once again. SoundHound AI offers conversational AI solutions such as voice-based AI agents, in-vehicle voice assistants, voice-based e-commerce, and voice-enabled AI chat assistants, among other things. Its solutions are deployed across multiple verticals such as restaurants, healthcare, contact centers, and connected devices. The market that SoundHound serves is currently in a nascent state. Market research firm Imarc Group estimates that the conversational AI market was worth just over $13 billion last year. Its size is expected to jump by 11x through 2033, clocking a compound annual growth rate of 29%. SoundHound's growth in the past three years suggests that it is benefiting nicely from the end-market opportunity on offer. As the chart indicates, the company's growth has picked up impressively in recent quarters. This remarkable growth can be attributed to the company's rapid expansion in industries such as restaurants and automotive, where the adoption of voice-based AI solutions is growing at a nice clip. SoundHound management pointed out in its first-quarter earnings report that its customers in the restaurant industry have been adding its voice AI-based answering and ordering solutions to more locations. The company is also expanding into new areas such as healthcare and retail. The robust adoption of SoundHound's solutions across multiple verticals is the reason why it reported impressive revenue growth of 151% in the first quarter. Another thing worth noting is that SoundHound is building multiple revenue streams. It gets royalties from the usage of its solutions in automotive, smart TVs, and other connected devices, along with subscription revenue from applications such as food ordering and customer service. The company is looking to further monetize its offerings through advertisements. Meanwhile, SoundHound's foray into the voice-based agentic AI market should ideally open another solid growth opportunity. The company recently announced its Amelia agentic AI platform through which customers can develop and deploy voice AI agents that can reason on their own and perform complex tasks. The integration of AI in customer support is expected to jump by 20x over the next decade, with the market expected to generate more than $53 billion in revenue in 2034. This is another example of how SoundHound is going after lucrative opportunities in the conversational AI market that should help the company continue to grow at elevated levels in the long run. SoundHound AI has turned to acquisitions to bolster its position in the conversational AI market. Its latest acquisition was that of Amelia last year, which improved its presence in the customer service market in verticals such as retail, finance, insurance, and healthcare. Similarly, its previous two acquisitions of Allset and Synq3 shored up its presence in online ordering, connected devices, and restaurants. It won't be surprising to see SoundHound making more acquisitions in the future, thanks to its healthy balance sheet. The company is almost debt-free and has a net cash balance of more than $240 million, which will come in handy if it decides to improve its presence further in the conversational AI space. As such, there is a good chance that SoundHound AI could become a much bigger company in the long run. The company is expecting to almost double its revenue in 2025 to $167 million, which is much faster than the pace at which the conversational AI market is set to grow. Assuming SoundHound AI averages annual revenue growth of even 30% over the next five years, which will be almost in line with the projected growth of its end market, its top line could hit $583 million in 2030. If SoundHound stock trades at even 15 times sales at that time, which would be a big discount to its current price-to-sales ratio of 34, its market capitalization could jump to $8.75 billion. That points toward a potential upside of 127% over the next five years based on its current market cap, which could be enough to help it beat the broader market's gains during this period.

Where Will SoundHound AI Stock Be in 3 Years? | The Motley Fool

Time moves quickly in the tech sector. Just three years ago, OpenAI's ChatGPT hit the scene, transforming the way people interact with information and spawning a brand new sector called generative artificial intelligence (AI). Over the next three years, investors should expect consumer-facing software companies like SoundHound AI (SOUN -3.47%) to play an increasingly important role in this opportunity -- potentially minting plenty of fortunes as they bring this technology into people's daily lives. Let's dig deeper to see how this story could play out for the company. There is no shortage of grandiose projections about generative AI, with analysts at Bloomberg expecting the industry to expand at a compound annual growth rate (CAGR) of 42% over the next decade. However, right now, most of the early winners are concentrated on the hardware side of the opportunity, providing the computer chips, servers, and cloud infrastructure that other businesses need to create consumer-facing software. SoundHound could help change this dynamic by unlocking the synergies between speech recognition and the large language models (LLMs) that power platforms like ChatGPT. This could be the low-hanging fruit of AI technology because it could drive cost savings by replacing human labor in applications like restaurant drive-throughs where the stakes are low enough that an occasional mistake won't lead to catastrophic outcomes. That said, while AI technology is promising, it remains hugely unreliable. Users often face "hallucinations," which is when the models generate incorrect responses. It is unclear how well customers will tolerate these challenges as LLMs become a bigger part of their daily lives. SoundHound has secured partnerships with mainstream restaurant brands like White Castle and Krispy Kreme, but so far, these deals look experimental. It can be tempting to focus on exciting headlines and deals between SoundHound and other companies. However, investors should pay more attention to SoundHound's financial results because this will give the clearest picture of how well its voice AI solutions are actually being adopted into the market. So far, the situation is complicated. First-quarter revenue soared by 151% year over year to $29.1 million. But while this top-line growth looks fantastic on the surface, it isn't necessarily organic or sustainable over the long term. SoundHound completed a slew of acquisitions in 2023 and 2024, which muddy the numbers. These deals include enterprise AI software company Amelia, which is expected to add $45 million in annual revenue. Other recent purchases include the online ordering platform Allset and restaurant AI software company SYNQ3. These new businesses are overshadowing the performance of SoundHound's prior core business. And the company's growth rate will likely slow considerably in the future. Furthermore, an acquisition-led strategy relies on using up valuable capital and could add more unprofitable businesses to SoundHound's already cash-burning operations, making the company more risky. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell from a loss of $15.4 million to a loss of $22.2 million. However, the good news is that SoundHound reports an impressive $246 million in cash on its balance sheet, which means it can sustain its losses for the foreseeable future without turning to outside sources of capital. SoundHound is shaping up to be an early mover in the race to bring AI technology into the consumer-facing mainstream. As LLM technology improves over the coming years, SoundHound's software solutions will become more viable and attractive to enterprise clients. That said, there is no need for investors to rush into the stock right now. As it stands, SoundHound is a small cash-burning business with no clear pathway to profitability. While the stock has a track record of occasionally booming based on exciting news events, it lacks the fundamental value to sustain these gains. Investors should wait until the numbers make more sense before considering a position in this speculative stock.

Prediction: 1 Stock That Will Be Worth More Than SoundHound AI 3 Years From Now | The Motley Fool

SoundHound AI (SOUN -3.47%) was one of the hottest stocks on the market in 2024, with phenomenal gains of 836% that year. Investors were buying stock in this conversational artificial intelligence (AI) solutions provider hand over fist thanks to its eye-popping growth. But the company's expensive valuation seems to have caught up with it this year. SoundHound stock has shed 46% of its value in 2025 so far. That's not surprising. Investors became risk-averse because of the tariff-fueled trade war that led to an increase in the risk of a global recession, leading to a sell-off in expensively valued stocks. SoundHound was trading at an expensive 90 times sales at the end of 2024 following its red-hot surge, which explains why it saw a sharp sell-off this year. The recent plunge in SoundHound stock brought its market cap to $4.33 billion as of this writing. However, the stock still trades at an expensive 39 times sales, which exposes it to the possibility of more downside. That's why it would be a good time to take a closer look at another fast-growing company that's trading at a much more reasonable valuation, and that has the potential to overtake SoundHound's market cap in the next three years. Ambarella (AMBA -15.21%) may not be a household name in the global chip market, as it is a small company with a market cap of $2.65 billion. However, the growing adoption of AI in devices such as security cameras, vehicles, drones, wearables, and Internet of Things (IoT) devices is giving its business a major boost. Ambarella's computer vision processors integrate video processing, image processing, audio processing, and AI algorithms into a single platform, making them ideal for deployment in the edge applications listed above. The company believes that the growing adoption of AI in edge devices is going to be a key growth driver for it in the long run. The market for chips that are capable of processing AI workloads locally in edge devices instead of sending data to the cloud is expected to grow by 20x by 2034. Ambarella is already getting a good chunk of its revenue from this segment, with edge AI accounting for 70% of the company's top line in fiscal 2025 (which ended on Jan. 31). The chipmaker finished the year with a 26% increase in revenue to $285 million. Ambarella management noted an improvement in both volumes shipped and the average selling price (ASP) last year. Importantly, Ambarella forecasts higher ASPs going forward thanks to the growth opportunity in edge AI. Not surprisingly, Ambarella's revenue forecast of $81 million to $87 million for the first quarter of fiscal 2026 points toward stronger growth of 54% on a year-over-year basis. Even better, the company expects to deliver a profit of $0.04 per share in the quarter, compared to a loss of $0.26 per share in the year-ago period. The good part is that Ambarella's robust bottom-line growth is expected to continue in the current fiscal year and beyond. The company sees its addressable market growing to more than $8 billion in fiscal 2028 thanks to the advent of AI, a 60% improvement over fiscal 2024 levels. Ambarella's revenue in the previous fiscal year tells us that it still has a lot of end-market opportunity to capture, which could lead to sustained growth in its top line. At the same time, the company points out that its new chips command above-average ASPs, which should translate into fatter margins and faster earnings growth in the future. This explains why Ambarella is expected to swing to a profit in the current fiscal year from a loss of $0.16 per share in the previous one, followed by terrific earnings growth over the next couple of years. While Ambarella's earnings growth is expected to take off, the same cannot be said about SoundHound, as the latter is expected to remain a loss-making company for the next three years. So, the market is likely to reward Ambarella stock with stronger gains on account of its improving earnings power. Moreover, SoundHound's valuation indicates that the stock has run ahead of itself. Ambarella, meanwhile, trades at a much cheaper 9 times sales. Analysts expect Ambarella's top line to hit $463 million after three years, which could send its market cap to $4.2 billion if it continues to trade at 9 times sales at that time. That would be a 60% jump from current levels. SoundHound's top line, meanwhile, is projected to jump to $277 million after three years, which means that it will have to command a premium valuation to keep up with Ambarella. However, a price-to-sales ratio of 9 at that time would result in a significantly lower market cap than Ambarella, suggesting that there is a strong possibility of SoundHound AI being overtaken by this semiconductor stock in the next three years.

Prediction: Investors Are Unlikely to Win With SoundHound AI Stock, and Here's Why | The Motley Fool

As SoundHound AI (SOUN -1.24%) has developed voice-recognition technology driven by artificial intelligence (AI) that has attracted high-profile clients, more investors have taken an interest in the company. Between that technology and rapid revenue growth, it may look like a stock poised to drive outsize returns. Unfortunately, SoundHound AI continues to deal with challenges that may call its investment case into question. Unless the company can mitigate those challenges, the stock is unlikely to succeed, and here's why. In many respects, SoundHound AI appears to be punching far above its weight. It has developed AI-based voice recognition technology, promoting it as "next-generation AI." With that, its technology can help customers perform tasks via voice prompts. This has drawn the interest of numerous corporate clients, particularly in the automotive industry. Moreover, the company has attracted restaurants, financial services businesses, telecom companies, and others to its platform. Despite its market cap of $4.1 billion, SoundHound AI has successfully earned business while competing with much larger players. It generated $29 million in revenue in the first quarter of 2025, a 151% increase from year-ago levels. And the company turned a profit in the first quarter, a goal that might have appeared out of reach a year ago quarter. During the quarter, it earned more than $129 million, up from a $33 million loss in the first quarter of 2024. That likely helped boost the stock. After a sell-off at the beginning of the year, it turned higher following the release of the report. Consequently, shares are up by about 115% over the previous 12 months. However, investors are likely to find some serious concerns as they look at the stock's financials more closely. The most obvious oddity is that net income was more than four times its revenue. And that occurred at a time when operating expenses for the first quarter were $99 million, which was more than three times the company's revenue in that quarter. It also reported a change in the fair value of contingent acquisition liabilities. This amounted to a $176 million noncash benefit that turned SoundHound AI profitable for the quarter. Hence, when examining the negative free cash flow of $19 million, the "profit" is not as promising as it appears. Currently, the company has almost $246 million in liquidity. This means it can sustain the current pace of negative cash flow for approximately three more years before having to add debt or issue more shares. Furthermore, it competes with numerous companies, including tech heavyweights Alphabet, Amazon, and Microsoft. All of those companies hold cash positions that far surpass SoundHound's market cap, meaning if one of these companies wants to compete directly, it is in a strong position to take market share from SoundHound AI. Also, even though the business may look like a buyout candidate, Nvidia recently sold its SoundHound AI stock, and no other tech giant has taken a position in the company. Knowing that, the case for the stock may rely too much on hope, which does not put its shareholders in a strong position. Under current conditions, investors are unlikely to succeed with this stock as a long-term investment. Admittedly, SoundHound AI has developed some compelling voice-driven technology with AI, and that has attracted some of the world's best-known enterprises as clients. Nonetheless, its first-quarter profit came from a one-time benefit, and with operating expenses far outpacing revenue, long-term profitability appears out of reach. Moreover, the company has to compete with some of the world's largest companies, which have plenty of resources. Unless the rapid revenue growth starts to translate into a dramatically improved financial performance, investing in SoundHound AI is unlikely to pay off for investors in the long term.

Is SoundHound AI a Buy? | The Motley Fool

Artificial intelligence (AI) stocks soared over the past two years as investors got excited about this potentially game-changing technology. And SoundHound AI (SOUN -1.35%), a company specializing in voice AI, saw its share price take off as part of this new gold rush. Over 2023 and 2024, SoundHound stock surged 1,000%, outperforming AI market superstar Nvidia, which climbed 800% during that period. But AI stocks lost some of their luster earlier this year amid concerns about economic growth and potential spending on this newish technology. President Trump set out plans for tariffs on imports, and investors worried that these duties would increase prices on a wide range of products, paving the way to a weak economy and even a recession. As a result, investors fled high-growth companies that could be among the first to suffer in such an environment. And that resulted in declines in AI stocks, including SoundHound. The voice AI player has lost about 50% since the start of the year. Yet the company continues to deliver explosive growth, reporting a revenue increase of 151% in the recent quarter. Meanwhile, Trump's initial tariff deal with China has offered investors optimism that tariffs may not be as tough on the economy as expected -- and that's helped indexes rebound. Is SoundHound AI a buy now? Let's find out. So, first, a bit of background on SoundHound, a company that stands out from rivals in the voice AI space thanks to its innovation. Most voice AI systems translate speech to text and then to meaning, but SoundHound translates speech directly into meaning. While this might seem like a detail, it actually makes a huge difference, resulting in speed and accuracy. This technology is protected by more than 200 patents, and this, along with strong barriers to entry, offer SoundHound a competitive advantage. All of this has helped SoundHound grow in a wide range of industries, from restaurants to automotive, healthcare, finance, and more. For example, the company recently expanded its phone answering and AI services contract with a major U.S. pizza chain. And in healthcare, it expanded or renewed contracts with three customers, including a major medical billing company. In the quarter, as mentioned, revenue soared in the triple digits. And importantly, revenue from each individual customer came in at 10% or less of total revenue, showing that SoundHound doesn't rely heavily on just one or two contracts but instead is well diversified. The fact that SoundHound's revenue totaled just under $30 million in the quarter suggests this company has plenty of room for expansion. The total addressable market for SoundHound's services is about $140 billion. This company also is taking big steps in an area that could represent the next AI growth driver, and that's agentic AI. This involves software that applies AI to real world problems by studying complex situations, finding solutions, and applying them. SoundHound recently launched its Amelia 7.0 platform, one that customers across industries can use to carry out a range of key tasks. SoundHound offered an example during its earnings call, saying Amelia could handle your reordering of a hard-to-pronounce prescription, the payment of a recent medical visit, and the making of a new appointment. It's also positive to note that SoundHound has a cash position of $246 million and doesn't have debt. So this AI player is in great shape to deliver more growth, especially considering that the AI market is expected to reach beyond $2 trillion by the early 2030s. This market isn't all voice AI, of course, but this enormous size shows demand for AI in general is high -- and SoundHound could be well positioned to benefit. All of this is great, but it's important to keep in mind that, even considering recent declines, SoundHound stock still looks pricey at current levels, trading at 38 times sales. So investors who are more value-oriented may find investments more adapted to their style elsewhere. It's also important to remember that in a market where uncertainty remains, investors may hesitate to invest in smaller, younger AI companies like SoundHound and may opt for giants like Nvidia or more diversified businesses like Amazon. This could weigh on SoundHound's performance in the near term. So, is SoundHound a buy? This depends on your comfort with risk and your investment style. As mentioned, SoundHound isn't a buy for value investors, and cautious investors should look to other stocks too. But for patient growth investors who plan on holding on for the long term, SoundHound makes a solid buy on the dip today.

Why Shares of SoundHound AI Are Soaring Today | The Motley Fool

Shares of the voice-powered artificial intelligence (AI) company SoundHound AI (SOUN 11.79%) traded nearly 13% higher as of 11:18 a.m. ET today. Analysts at Piper Sandler initiated coverage of the stock Tuesday morning with an overweight rating. Piper Sandler analyst James Fish wrote in his initiation note that SoundHound, which provides advanced AI voice assistants, is a great way to play the AI trade, and the company has just begun to tap into its potential. He added that he sees a combined $30 billion serviceable addressable market by 2027. Furthermore, Fish and his team expect SoundHound to transition to more of a subscription model, in which revenue from this segment of the business could make up 90% of total revenue in just a few years. Two years ago, subscription revenue represented just 4% of total sales. Fish has a price target on the stock of $12, implying another 12% upside, even after this recent rally. SoundHound AI certainly looks to have a long runway and is making financial progress as well. Revenue in the first quarter of 2025 grew more than 150% year over year, while the company reported $0.31 earnings per share and a $0.06 loss per share on an adjusted basis. With a $4.3 billion market cap, the stock is still expensive, so like many of my recommendations on these AI stocks with big potential, you can start to accumulate shares but don't need to go all in just yet.

SoundHound Stock: The Rise Of A Voice AI Powerhouse (NASDAQ:SOUN)

Despite a premium valuation and risks from competition and customer concentration, I remain bullish on SoundHound as a long-term AI voice interface leader. SoundHound AI, Inc. (NASDAQ:SOUN) is emerging as a pure-play leader in voice artificial intelligence at a time when voice interfaces are poised to become ubiquitous. The company's voice recognition and natural language understanding platform, built "AWS Certified AI Practitioner Early Adopter"I am a DevOps Engineer for a major, wholly owned subsidiary of a large-cap Fortune 500. I am a true subject-matter expert on the actual buildout, deployment, and maintenance of AI tools and applications. I have increasingly deep knowledge on the science behind generative AI systems as a result of first-hand experience with machine learning algorithms, model training, and model deployment.I am currently in the process of obtaining more advanced AWS machine learning certifications to further my AI and machine learning expertise. I contribute to Seeking Alpha as an outlet to share my AI and machine learning insights through an investment-focused lens.Per TipRanks (5/15/25)2 Year Timeframe#856 out of 30,634 Financial Bloggers #1,404 out of 40,003 experts Analyst's Disclosure: I/we have a beneficial long position in the shares of GOOG either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

SoundHound shares jump as Piper Sandler starts coverage at Overweight By Investing.com

Investing.com -- Piper Sandler has initiated coverage on SoundHound AI (NASDAQ:SOUN) with an Overweight rating and a $12 price target, describing the company as a "direct play on the A.I revolution" through its voice-AI platform. The company's shares jumped 5% in premarket trading Tuesday. The broker's analysts argue that SoundHound's technology, particularly its combined ASR and NLP architecture, offers a competitive advantage in delivering dynamic, real-time conversational AI experiences. SoundHound's product suite spans across the auto, IoT, restaurant, and customer service sectors, with Piper Sandler identifying quick-service restaurants (QSRs) and customer experience (CX) as the company's most promising verticals. The acquisition of Amelia has enabled SoundHound to enter the conversational AI space for contact centers, which Piper Sandler sees as a $30 billion addressable market by 2027. "Combined, we see a $30B serviceable addressable market by 2027, with SoundHound an early leader in each market," analysts James E. Fish and Caden Dahl said in a Monday note. They also see improving financial leverage as the company transitions to a subscription-based model. Subscription and "Over-Time" revenues are expected to comprise about 90% of total revenues by 2027, up from just 4% two years ago. Piper believes this shift, along with anticipated synergies from the Amelia acquisition, will help drive margins higher. "At a minimum, we think synergies could boost margins by >10% over the next few years." Despite their bullishness for the long-term opportunity, SoundHound is not without its challenges, particularly in the auto segment where production headwinds persist. Auto exposure is currently around 25% of global production, but SoundHound's four key OEM clients are expected to see a 4% decline in sales this year. "We are wary of other items such as auto production, low profitability but need for more awareness, and debate around organic growth, but see the opportunities and setup as more compelling at these levels," the analysts concluded.