Motley Fool says SoundHound AI is a 'buy' now after recent correction

Now is the time to buy shares of SoundHound AI, a developer of AI-powered voice assistants, according to Motley Fool analyst Anders Bylund in his latest update on the company. In October, he advised investors to stay on the sidelines, citing signs of the stock "sliding back into the meme stock phenomenon again." Since then, SoundHound AI’s share price has nearly halved.

Shares of SoundHound AI, which develops voice assistants for the automotive and restaurant industries, have dropped 38% to about $11.23 apiece over the past three months despite a steady stream of investor-friendly news, Bylund writes.

As evidence, he points to three company press releases, including a December 2025 announcement of the integration of SoundHound’s platform with OpenTable, a restaurant reservation service owned by Booking Holdings. The partnership, which expands SoundHound AI’s reach in voice-enabled restaurant bookings, should have supported the share price, but did not, the analyst notes.

Bylund argues that the company retains significant growth potential as adoption of AI and voice-control technologies accelerates. For the third quarter, SoundHound AI reported a 68% year-over-year increase in revenue to $42 million and again raised its full-year 2025 revenue guidance to $165-180 million from a previous range of $160-178 million.

The analyst expects the company to report further growth in its order backlog when it releases its next quarterly results in February, which he says should translate into higher revenue and, eventually, net profit.

Existing long-term contracts are expected to generate more than $1.2 billion in revenue over the next seven years, Bylund adds.

He describes SoundHound AI shares as “great buy right now,” while cautioning that the risks remain substantial. The company is still unprofitable and “has an uncomfortable habit of raising more cash by printing more stock shares,” he writes.

Over the last 12 months, SoundHound AI shares have fallen nearly 44%. Just three months earlier, however, the picture looked very different: as of October 1, the stock was up 244% versus a year earlier, levels Bylund described at the time as a “nosebleed-inducing valuation.”

He characterized the rally as “silly,” linking it primarily to social media-driven enthusiasm rather than to changes in the company’s fundamentals. On that basis, he advised investors to wait until the meme rally had run its course before reconsidering the stock.

SoundHound AI currently has seven “buy” ratings versus two “hold” ratings from Wall Street analysts, according to MarketWatch data. The average target price of $16.64 per share implies upside of about 48% from the most recent closing price.