What Happened?
Shares of voice AI recognition company SoundHound (NASDAQ: SOUN) fell 4.5% in the morning session after the company received a downgrade from a Wall Street analyst. Piper Sandler adjusted its rating on the voice AI and conversational intelligence company from "Overweight" to "Neutral," citing concerns about the company's outlook for the second half of 2025.
The firm noted that while SoundHound's long-term potential remains, there's a risk that some deals could be pushed into 2026. The analyst also highlighted the challenge SoundHound faces in trying to achieve profitability while investing in its product lines, suggesting that success could lead to higher earn-outs and share dilution. This more cautious stance comes despite Piper Sandler maintaining its $12 price target on the stock. The downgrade introduces a more balanced view on the company's near-term prospects, especially after the stock's significant run-up in recent months.
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What Is The Market Telling Us
SoundHound AI’s shares are extremely volatile and have had 94 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
SoundHound AI is down 45.2% since the beginning of the year, and at $11.06 per share, it is trading 54.4% below its 52-week high of $24.23 from December 2024. Investors who bought $1,000 worth of SoundHound AI’s shares at the IPO in April 2022 would now be looking at an investment worth $1,474.
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