What Just Happened To SoundHound AI Stock

Shares of SoundHound AI (SOUN) lost 75.6% over the year from October 19, 2025, to October 19, 2026, while the S&P 500 returned 16.8%. The stock fell in a year when the voice AI company kept selling more, raising its 2026 revenue outlook on August 5, 2026. Its deal to buy LivePerson also moved closer to closing. So if the sales held up, what did change for SoundHound shareholders?

Investors Now Pay Far Less For SoundHound's Sales

The company generated $203 million in revenue over the twelve months to June 30, 2026. This represented a 54.6% increase from a year earlier, yet the share price fell. At the end of June 2025, nearly four months before the decline began, investors valued the stock at 32.7 times the previous twelve months of sales. By the close on October 19, 2026, the shares were priced at 9.9 times sales, compared with 3.1 times for the S&P 500.

SoundHound fell largely on its own. Among its three listed peers, Twilio and Five9 rose over the same year and Cerence fell 20.0%, so the market did not mark down the whole group.

SoundHound's Gross Margin Fell As It Bought Companies

MarketWatch reported on May 7, 2026, that SoundHound stock fell as acquisitions weighed on first-quarter results. Gross margin in fiscal Q1 2026 dropped to 31.1%, compared with 47.9% in the prior quarter.

Over a longer stretch, the twelve-month gross margin dropped from 69.1% in the year to June 2024 to 40.5% in the year to June 2025. It has since edged up to 42.3% in the year to June 2026. Management said on the fiscal Q2 2026 call that acquisitions have temporarily hurt gross margin, and they set a target of a gross margin above 70% for the future.

Further down the income statement, operating losses run close to the size of the business. SoundHound lost $201 million at the operating level over the twelve months to June 2026, losing almost a dollar for every dollar of sales. With earnings below zero, a price-to-earnings multiple is not meaningful.

Revenue Is Still Growing Fast At SoundHound

Revenue in fiscal Q2 2026 rose 45% from a year earlier. Management now expects 2026 revenue to land between $230 million and $260 million, up from $169 million in 2025, and that forecast leaves out the LivePerson deal.

SoundHound relies on its cash reserves to cover its losses. It held $203 million in cash and short-term investments at June 30, 2026, against debt of $5.44 million. Over the twelve months ending on that date, the company spent $125 million more cash than its business brought in.

The share price fell, but SoundHound's growth held up and its balance sheet still carries almost no debt. SoundHound's gross margin, which was 45.1% in fiscal Q2 2026, is the number to watch in the report expected on or around November 4, 2026.

Does This Mean You Should Act On SOUN?

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