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SoundHound is transforming into an agent AI company.
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Its voice-first approach could be a huge differentiator for the business.
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If it can achieve EBITDA profitability next year, that could be a big tailwind for the stock.
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When looking at artificial intelligence (AI) stocks that have been through tough times, Sound Hound Artificial Intelligence (NASDAQ: SOUN) is one of the more interesting stocks that could rebound in 2026. The stock is down more than 50% from its 52-week high and nearly 40% this year.
SoundHound first came to attention in NVIDIA It was revealed that it took a stake in the voice artificial intelligence company in the fourth quarter of 2023. The chip giant later sold its stake in the company at a substantial gain in the fourth quarter of 2024, a fact that caused the company’s stock price to plummet when it was revealed earlier this year.
However, SoundHound is already on a very different path than when Nvidia acquired it, which could set it up for a strong rebound in 2026.
SoundHound is still a very young company, but it already has a history of quickly adapting to the changing technology landscape. The company actually started out as a music recognition app, but it leveraged its work on the technology to create a voice AI platform.
Its voice technology does more than simply transcribe what someone says or respond with pre-programmed answers. Instead, it seeks to interact with people more naturally, understanding someone’s intention before they finish speaking, just like humans. It is able to do this through the patented “Speech to Meaning” and “Deep Meaning Understanding” technologies it developed.
The company gained early traction in the automotive space as automakers began looking for better voice assistants for their cars. SoundHound’s platform makes it easier for car owners to interact with their vehicles. With just a voice command, they can get directions or find nearby restaurants that match certain criteria. It can also provide real-time assistance to drivers through the car manual.
SoundHound is also establishing itself in the restaurant industry. Here, it takes orders by phone, kiosks and drive-thru. It even offers solutions to help employees complete tasks via headsets when they need help.
However, after acquiring Amelia last year, SoundHound once again sought transformation. Amelia is a virtual agent provider for regulated industries such as healthcare and financial services, which have compliance considerations and industry-specific terminology. Amelia’s technology is strong in conversational intelligence, such as recognizing context and emotion, but it doesn’t have SoundHound’s speed and accuracy in processing natural language.
SoundHound combines Amelia’s technology with its own to not only enhance its voice platform but also form the foundation for its move to voice-driven AI agents. It hopes to offer not just AI voice assistants, but AI agents that can act as virtual employees. This is a huge leap and where the market is headed. SoundHound has begun moving its largest customers to the new Amelia 7 platform, which uses artificial intelligence agents to handle complex customer and employee interactions.
As the world moves from generative AI to AI agents, this could be the next big market. While many companies are working on the development of artificial intelligence agents, SoundHound stands out through its voice-first approach. This can be a big advantage because if an AI agent is to go out and perform a task, they can better fully understand what a person is saying and their intentions.
SoundHound’s revenue has grown rapidly this year. Its revenue more than doubled in the first nine months and was up 68% last quarter. Perhaps more importantly for investors, though, the company is approaching earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability. The company said fourth-quarter EBITDA should be profitable if it hits the high end of its revenue target.
Given that SoundHound’s AI agent journey has just begun, it still has a long way to go. If the company can achieve profitable EBITDA next year, continue to improve gross margins, and continue to grow revenue quickly, the stock should rebound strongly in 2026.
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Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has a position and recommends Nvidia. The Motley Fool has a disclosure policy.
Down 50%, This Growth Stock Looks for Recovery in 2026 Originally Posted by The Motley Fool