Down 54% Year-to-Date, Is It Time to Buy the Dip in SoundHound AI Stock?

Artificial intelligence (AI) voice software specialist SoundHound AI (SOUN) has been struggling since its March 4 disclosure that it would be unable to file its 2024 annual report on time due to complexities in accounting for its acquisitions of Synq3 and Amelia Holdings. The company identified material weaknesses in its internal financial controls, which further rattled investor sentiment following the news that Nvidia (NVDA) had unloaded its SOUN stake. 

Despite these setbacks, SoundHound's underlying business shows promise with projections indicating significant revenue growth, as sales are forecasted to reach $166.2 million in 2025, representing a 96% increase. So, should investors buy the dip in SOUN stock - or take a pass?

Key Levels to Watch for SOUN Stock

The company's stock performance has been volatile, with shares down 54% year-to-date in 2025, though it maintains a strong two-year performance with gains exceeding 330%.

SOUN’s recent lows were contained by longtime support at its 200-day moving average, at $8.34, though potential resistance looms overhead in the form of its 50-day moving average, currently at $13.51.

Is SoundHound AI a Good Bargain Buy?

SoundHound, currently valued at a market capitalization of $3.59 billion, presents a complex growth stock investment case, with troubling technical signals alongside its fundamental challenges. Those challenges, including negative earnings (EPS of -$0.93) and an extremely high price/sales (P/S) ratio of 21.92x, are now reinforced by deteriorating technical indicators, suggesting increased downside risk. 

The combination of weakening technical signals and stretched valuation metrics strongly supports a "Sell" recommendation at current levels. While the company's revenue growth remains solid, with sales of $84.7 million in 2024, the technical deterioration and fundamental overvaluation suggest investors should wait for both stabilizing price action and a more attractive valuation before considering new positions. 

In particular, SOUN’s negative profit margin of -414.12% and weak technical momentum indicate that the stock's previous upward movement may have been excessive, supporting a more reasonable valuation range of $4-5 per share. Given the bearish technical outlook and fundamental concerns, investors should exercise extreme caution with SoundHound AI stock until both technical signals improve and valuation metrics normalize to more sustainable levels.

This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor had a position in: NVDA , SOUN . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.