SoundHound Stock Soars 20% on ‘Strongest Ever Quarter’

SoundHound AI stock rose 120% over the past 12 months coming into Friday trading. (Simon Lehmann | Dreamstime.com)

SoundHound AI stock jumped after the voice-based artificial-intelligence company beat expectations in what CEO Keyvan Mohajer called its “strongest ever quarter.”

Shares rose 24% to $13.26 in early trading Friday, having fallen 46% this year through Thursday’s close.

“SoundHound is capturing market share across a massive and underpenetrated TAM [total addressable market] while making progress toward profitability,” said D.A. Davidson analyst Gil Luria in a Friday note where he reiterated a Buy rating on the stock and raised his price target to $15 from $10.

CFO Nitesh Sharan was on a similar track. “We are moving with speed to capture the explosion we’re seeing in the voice and conversational AI industry,” he said in a statement late Thursday.

The momentum led the company to raise its full-year outlook, and it now expects revenue between $160 and $178 million, with the midpoint above the $164 million expected by analysts polled by FactSet.

SoundHound’s second-quarter adjusted loss per share was 3 cents, better than the expected loss per share of 5 cents, according to FactSet.

Revenue rose 217% year over year to $43 million, above expectations of $33 million, driven by new wins and cross-selling of products across customers.

Write to Elsa Ohlen at elsa.ohlen@barrons.com