Is SoundHound AI Stock a Buy?

SoundHound AI (SOUN) remains a polarizing investment despite its technological promise. The stock, which surged during the meme stock frenzy of December 2024, still trades at a steep 38 times trailing sales. Second-quarter 2025 results revealed a $78 million operating loss against $42.7 million in revenue, with cash burn accelerating to $18.5 million. Share dilution compounds the problem—outstanding shares grew 21% year-over-year, eroding per-share value.

Cost inflation is stark: revenue expenses quintupled to $26 million, while sales and marketing outlays nearly tripled. Though noncash adjustments soften the blow, the underlying financial strain is undeniable. For now, the company relies on equity sales to fund operations, a precarious strategy for long-term holders.