Is SoundHound AI Stock a Buy Now?

• SoundHound is unprofitable, and immoderate of its halfway expenses are rising quickly.

• The institution is burning done currency arsenic it tries to carve retired a niche successful conversational AI.

• SoundHound's banal is expensive, and investors are astir apt amended disconnected avoiding it for close now.

• 10 stocks we similar amended than SoundHound AI ›

SoundHound AI (NASDAQ: SOUN) has captured the attraction of artificial quality (AI) investors implicit the past fewer years due to the fact that of the company's awesome conversational AI technology. The institution has attracted an awesome lawsuit list, including Chipotle and Hyundai, and an archetypal concern from Nvidia gave the institution adjacent much credibility successful a oversea of different AI stocks.

But recently, SoundHound banal has mislaid its luster. Nvidia sold its stake, and immoderate investors grew acrophobic astir the company's deficiency of profits, resulting successful SoundHound's stock terms tumbling 43% implicit the past year. While the caller pullback whitethorn look similar a bully buying opportunity, here's wherefore investors shouldn't stake connected SoundHound AI banal conscionable yet.

SoundHound precocious reported its third-quarter results, with the company's gross rising 68% to $42 million. That was much than the $40 cardinal successful gross that Wall Street had estimated for the quarter, which gave investors immoderate assurance the institution was connected the close track.

But 1 glaring occupation is that SoundHound is inactive importantly unprofitable and costs are rising. The institution reported a non-GAAP nonaccomplishment per stock of $0.03 successful the quarter, a flimsy betterment from its nonaccomplishment of $0.04 successful the year-ago quarter.

However, adjacent with this improvement, it's important to enactment that SoundHound's expenses are inactive rising. If we look astatine SoundHound's third-quarter non-GAAP expenses, which don't see a $66 cardinal non-cash alteration successful liabilities related to acquisitions, determination are inactive sizeable rising costs:

Source: SoundHound AI.

With SoundHound's costs rising truthful quickly, the company's expanding income go little impressive, and it's wide the institution apt isn't adjacent to being profitable immoderate clip soon.

SoundHound AI is successful a highly competitory market, and it's burning done currency to beryllium there. In the archetypal 9 months of 2025, SoundHound's escaped currency travel was antagonistic $78.7 million, which was worse than its antagonistic escaped currency travel of $76.3 cardinal successful the archetypal 9 months of 2024.