SoundHound (SOUN), the voice technology company behind conversational artificial intelligence (AI) solutions, has seen its stock take a beating in recent months. After soaring to a high of $24.98, the stock has plunged over 57% from that peak and is down nearly 49.4% year-to-date. While the stock is still up 158% over the past 12 months, the recent selloff has eroded significant value from its market cap.

Part of the downward pressure came from Nvidia’s (NVDA) decision to exit its position in SoundHound. That move, combined with broader macroeconomic uncertainty, spooked investors and contributed to the stock’s sharp decline. Adding to the concern is the company’s high valuation. SoundHound is currently trading at a steep price-sales (P/S) ratio of over 46.6x, implying that the market is already pricing in a lot of positives.

However, SoundHound’s fundamentals are showing signs of strength. Its revenue growth is accelerating. In the first quarter of 2025, SoundHound’s top line surged by 151% year-over-year. That follows an impressive increase of 101% in Q4 2024, 89% in Q3, and 54% in Q2. The acceleration in its top-line growth rate reflects growing demand for SoundHound’s AI-driven voice technology.

The company’s momentum appears sustainable as its addressable market is rapidly expanding with businesses across multiple sectors adopting voice AI technology. Moreover, with a diversifying customer base and a strong sales pipeline, SoundHound is well-positioned to capitalize on growing demand.

SoundHound Has Significant Growth Opportunity

SoundHound is delivering impressive results, and the momentum in its business is likely to sustain. In its latest quarterly report, the company announced Q1 revenue of $29.1 million, up 151% year-over-year. Moreover, SoundHound has taken steps to diversify its revenue customer base. For the first time, no single customer accounted for more than 10% of total revenue, a notable shift that reduces customer concentration risk and reflects the company’s growing reach across different industries.

Customer demand is building. Bookings continue to climb, both sequentially and on a strong year-over-year basis, reflecting heightened interest in SoundHound’s voice AI solutions. This traction is particularly visible in the restaurant and enterprise sectors, where location growth and customer service applications are accelerating. Meanwhile, in the automotive segment, SoundHound is benefiting from rising average selling prices, thanks to the deeper integration of its generative AI capabilities.

Management remains confident about the future, citing the large pipeline and a continually expanding total addressable market (TAM). This positions SoundHound for substantial growth in the years ahead. A growing number of OEMs and restaurant chains are showing enthusiasm for the company’s voice commerce solution, which augurs well for future growth.

SoundHound’s strategic acquisitions are also paying off. The integration of Synq3 is already helping SoundHound upsell its existing product suite to a broader customer base. The Allset acquisition is enabling the company to connect restaurant partners with its growing automotive clientele, creating a unique voice commerce ecosystem. Meanwhile, the acquisition of Amelia is helping SoundHound break into new industries, while also expanding its presence with existing merchants.

On the operational front, SoundHound continues to evaluate and improve certain lower-margin legacy contracts, either enhancing their profitability or phasing them out altogether. These efforts, combined with a ramp-up in revenue, are expected to drive sequential improvements in adjusted EBITDA throughout the year.

Notably, the company remains focused on its path to profitability. With several cost discipline measures already in place, SoundHound reiterated its expectation to reach adjusted EBITDA profitability by the end of 2025.

Is Now the Time to Buy SoundHound Stock?

Given the valuation concerns and macroeconomic uncertainty, not all analysts endorse buying SOUN stock. As a result, the stock holds a “Moderate Buy” consensus rating.

Still, the current pullback might represent a compelling entry point as SoundHound is still in the early stages of a compelling growth story, with strong revenue expansion and increasing demand for voice AI technology across industries.