Ryan Vanzo, The Motley Fool

Sat, May 24, 2025, 5:30 AM5 min read

• Shares of the voice recognition specialist have plummeted in value this year.

• But sales are expected to grow by nearly 100% as the overall AI market expands.

• SoundHound still trades at a hefty multiple, making it suitable only for patient investors.

• 10 stocks we like better than SoundHound AI ›

SoundHound AI (NASDAQ: SOUN) had a terrific 2024. Last year, shares spiked in value by more than 800%. So far in 2025, it's been a different story, with shares losing more than 40% over a span of just five months. And yet when you look at analyst expectations for revenue growth, the picture looks extremely rosy, with 87% sales growth expected this year.

Could this be your chance to buy into a high-growth AI stock on the cheap? Yes, but there are two risks you'll want to understand before jumping in.

The AI revolution is in full swing. Spending on AI technologies is expected to accelerate in the years to come despite a strong upward trajectory in both 2023 and 2024. According to one estimate, the AI market is expected to grow from around $370 billion in value today to more than $2.4 trillion by 2032. That's a compound annual growth rate of more than 30% for nearly a decade!

Companies like SoundHound should benefit immensely from this rise in spending. As its name suggests, SoundHound's business model revolves around sound. More specifically, it has developed a voice AI suite that can help companies integrate voice AI into their own businesses. Drive-thru windows are a prime example, as are customer support lines and in-vehicle personal assistants.

SoundHound has already signed on partners including Applebee's, Honda, and Planet Fitness to pilot its technologies in all of these use cases. By integrating AI voice assistants into these verticals, SoundHound believes customers can lower costs while increasing efficiency and customer satisfaction over the long term.

SOUN Revenue (TTM) data by YCharts

Unsurprisingly, SoundHound's revenue has taken off with the rest of the AI industry. This year, analysts expect sales to jump by nearly 90%. Another 25% jump is expected in 2026.

Long term, SoundHound has a large total addressable market. Most estimates believe the voice AI market will be worth somewhere between $40 billion and $50 billion over the next decade, growing at a similar annual rate as the rest of the AI market. With a total sales base of just $102 million, SoundHound should be able to maintain double-digit sales growth for years to come. But before you jump in, make sure you understand the key risks involved.