Nvidia Just Gave SoundHound Stock a Big Lift. Should You Buy SOUN Shares Here?

• StockStory Top Pick NVDA -0.97%
• SOUN -0.62%

SoundHound (SOUN) shares rallied as much as 12% today after Jensen Huang, the chief executive of Nvidia (NVDA), attempted to silence AI bubble concerns, saying “we see something very different.”

The artificial intelligence-enabled speech recognition company’s 14-day relative strength index sits at less than 30 currently, below the oversold threshold, indicating potential for continued upward momentum in the near term.

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Following an initial spike, SoundHound stock reversed much of its intraday gains on Nov. 20, and is now trading nearly 50% below its year-to-date high set in mid-October.

Is SoundHound Stock a Great Pick for 2026?

Despite this boost from Nvidia, investors must tread with caution on SOUN stock as the company’s own financial trajectory presents a nuanced picture that requires careful evaluation.

In its latest reported quarter (Q3), the voice AI firm recorded a healthy 68% year-over-year increase in its revenue to $42 million, although this represented a sequential decline from $42.7 million.

Even in percentage terms, the quarterly revenue growth was alarmingly slower than 217% reported in the second quarter, reflecting challenges inherent in early stage commercialization efforts.

More importantly, insiders have exclusively sold SoundHound shares over the past 12 months, which makes them all the more unattractive to own heading into 2026.

Cash Burn Remains an Overhang on SOUN Shares

SOUN shares appear risky to own also because of the company’s deteriorating profitability metrics and mounting cash burn.

On a GAAP basis, the Nasdaq-listed firm lost $109 million in the third quarter and ended the three-month period with only $269 million in its cash reserves.

SoundHound faces increasing pressure to achieve profitability soon or risk diluting its existing shareholders through fresh capital raises.

Finally, the company based out of Santa Clara, California is going for 55x sales at the time of writing, a multiple that dwarves even Nvidia at 34x only.

SoundHound Hasn’t Fallen Out of Favor With Wall Street Analysts

Despite the aforementioned risks, Wall Street analysts remain bullish on SoundHound stock at current levels.

According to Barchart, the consensus rating on SOUN shares remains at “Moderate Buy” with the mean target of nearly $17 indicating potential upside of more than 45% from here.

This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com