Getting Aggressive on SoundHound AI After Record-Breaking Update
This specialized AI niche is receiving attention from retail traders.
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The market is off to a positive start on Monday morning with breadth running nicely positive, but the Magnificent Seven MAGS are mixed as Apple AAPL gives back some of its giant, recent gains. Small caps are doing well with the Russell 2000 up 0.24%.
My top pick for the year, Xeris XERS, is up another 8% and is running hot. I've traded this stock for years, and it is exciting to see that it is now at a new level. It is no longer just a small-cap biotechnology penny stock. It has solid revenue and EPS growth, and there is a strong pipeline. It is now a stock that will attract institutional interest and will catch the eye of momentum traders. I believe it still has substantial upside potential.
There continues to be a very good supply of speculative action in secondary stocks. Traders are looking for action, and they are helping to create it as they pile into some of the most active names.
A new name that I started last week is SoundHound AI, Inc. SOUN. SOUN is a global leader in voice and conversational artificial intelligence (AI). It develops products and solutions that allow businesses to deliver advanced, voice-enabled customer experiences. The company's proprietary technology is focused on voice recognition and conversational intelligence. It integrates large language models to provide fast, accurate and natural interactions in multiple languages.
SoundHound offers products in these key areas:
- Automotive: Powers in-vehicle voice assistants for brands like Hyundai, Kia, Mercedes-Benz, Stellantis and others, enabling features like voice commerce and navigation
- Restaurants: Smart ordering and dynamic drive-thru are AI ordering systems used in chains such as Chipotle, Red Lobster and Peter Piper Pizza to streamline phone and drive-thru ordering
- Enterprise AI: Through its Amelia platform, SoundHound offers AI agents for customer service and employee support in industries like financial services, healthcare and retail, serving seven of the top ten global financial institutions
- Retail and Other Verticals: Deploys smart answering for businesses like fitness chains and personal care companies, automating customer interactions
- Voice Commerce: Develops ecosystems where AI agents facilitate transactions, such as ordering food or booking services directly through voice interfaces in cars or devices.
SOUN also recently launched Vision AI, which integrates visual understanding with its voice platform for more natural AI interaction.
On July 31, SoundHound announced a strategic partnership with Acrelec, which is a subsidiary of GLORY LTD, a Japanese company focused on cash-handling systems. The venture aims to bring advanced, voice-enabled drive-thru systems to restaurants worldwide.
The companies will integrate SoundHound's sophisticated dynamic drive-thru voice AI technology with Acrelec's content management system and digital signage enclosures. This combined solution enables customers to place orders seamlessly through an automated voice assistant, which processes requests and sends them directly to the point-of-sale system. The fully integrated system not only offers consumers greater speed and convenience but also helps restaurants optimize labor by freeing up staff to focus on restaurant operations, while remaining available to assist when needed.
Acrelec currently has over 25,000 drive-thru installations worldwide, with leading brands like McDonald's and Dunkin'. The company supports over 80,000 technology deployments globally, including kiosks, self-checkout and click-and-collect systems.
The most significant recent development for SoundHound AI is its record-breaking second-quarter 2025 financial performance, reported on August 7, 2025. The company achieved revenues of $42.7 million, which is a 217% year-over-year increase and surpassed Wall Street's consensus estimate of $33 million. This growth was driven by strong demand across the automotive, restaurant and enterprise AI sectors, bolstered by strategic acquisitions like Amelia ($80 million) and Allset in 2024.
SoundHound also raised its full-year 2025 revenue guidance to $160 million to $178 million. Additionally, the company reported a narrower-than-expected non-GAAP net loss of $0.03 per share and a $1.2 billion enterprise bookings backlog, signaling robust future growth. Wedbush is calling SoundHound an "under-appreciated pure-play AI company" and raised its price target to $16.
Technically, the stock broke out of a low-level base and formed a "pocket pivot" pattern. Volume was extremely high and should attract increased interest. There is a large short position also, which may help to fuel additional upside.
As always, I do not plan to chase the open on Monday but will aggressively trade the stock as it develops.
There is some interesting trading action out there, even though the indices are mixed.
At the time of publication, DePorre was long XERS and SOUN.
