Investing in fast-growing businesses is exciting, but it’s important not to get too caught up in a company’s growth rate. An easy way for companies to increase sales is to acquire other businesses. But ultimately what matters most to growth investors is how well the business is growing organically, not just through acquisitions.
Soundhound AI (Thorn 4.96%) is a voice artificial intelligence (AI) company that relies on acquisitions to become bigger and more diversified. But investors are looking for more than just sales growth from the business, and the stock is down about 64% from its 52-week high, pointing to poor performance in recent months.
The company will report its fiscal 2026 first-quarter results on May 7, which will inevitably be the latest test that the company is moving in the right direction. Is now a good time to buy SoundHound AI stock given its relatively low valuation?
Image source: Getty Images.
SoundHound’s growth has been very erratic.
SoundHound has experienced significant revenue growth in recent years, but its actual quarterly growth rate varies widely from period to period. In the latest period covering the last three months of 2025, the growth rate was nearly 60%.
SOUN Revenue (Quarterly YoY Growth Rate) Data by YCharts
The acquisition has obscured SoundHound AI’s growth story as it boosted the company’s sales, but it is not indicative of the company’s true organic growth rate. As a result, SoundHound’s growth starts to look less impressive when you take that into account.
One of the company’s biggest deals was the $80 million acquisition of AI company Amelia AI in August 2024, which helped it significantly expand its customer base. Most recently, on April 21, the company announced acquisition plans. live personcalls the company a “pioneer in enterprise conversational AI” and has a deal that values the business at $43 million.
But SoundHound AI still isn’t profitable because of all the work it does. The company suffered a net loss of more than $14 million in 2025, which included changes in the fair value of contingent acquisition liabilities totaling $163 million, which made the bottom line look much better than it would have been otherwise.
Today’s changes
(-4.96%) $-0.40
current price
$7.66
Key data points
Market capitalization
$3.4 billion
daily range
$7.60 -$8.01
52 week range
$5.83 -$22.17
volume
220K
average volume
27M
gross profit
32.96%
Why I won’t buy SoundHound AI stock
SoundHound AI’s business is growing, largely due to acquisitions. And by continually acquiring companies, the process increases cost and complexity, which inevitably needs to be cut from the business if it wants to quickly return to profitability.
At a time when investors are starting to question their spending and investments in AI, SoundHound AI’s high growth rate may not be enough. It wasn’t enough to give AI stocks a big boost when they released their fourth-quarter results in February, and I don’t think it’s been enough to win over growth investors now.
The stock is down 19% this year, and I think it will continue to struggle in the coming weeks and months unless there is a significant improvement in earnings. There’s no need to rush into buying the stock, as a wait-and-see approach with SoundHound AI may be in order.
