SoundHound AI, Inc. (SOUN): A Bull Case Theory

We came across a bullish thesis on SoundHound AI, Inc. on Stay Invested’s Substack by Denis Gorbunov. In this article, we will summarize the bulls’ thesis on SOUN. SoundHound AI, Inc.’s share was trading at $13.42 as of September 2^nd.

SoundHound (SOUN) went public in 2022 through a SPAC merger at the peak of a crowded and overhyped market. The timing was unfortunate, as interest rates were rising, SPACs were collapsing, and investors grew wary of unprofitable companies, leaving SOUN stock struggling. Since then, however, the company has undergone a sharp turnaround.

Financial results highlight the momentum: revenue has surged 217% year-over-year and 137% over the past four quarters, while the balance sheet remains strong with no long-term debt and $230 million in cash. Despite uneven earnings, including a recent loss of $74.7 million following a one-time profit of $130 million, SoundHound is gaining traction with institutional investors, who now hold a significant stake.

The company’s technology is at the heart of its appeal. SoundHound specializes in voice AI and audio recognition, with three primary offerings: Houndify, a customizable voice interface platform for brands across autos, appliances, and customer service; music recognition technology akin to Shazam; and voice-driven customer support that enables natural interactions in drive-thrus and call centers. Unlike many legacy systems, SoundHound’s speech-to-meaning engine allows it to understand context and intent, delivering faster, more human-like responses.

Operating as a SaaS business with usage-based pricing, SoundHound benefits from recurring revenue and scalability as adoption grows. Partnerships with automakers, quick-service restaurants, and device manufacturers underscore rising demand. In an increasingly voice-first, IoT-driven world, every connected device represents a potential growth avenue. With improving fundamentals, strong technology, and sticky customer relationships, SoundHound is positioned for sustained expansion.

Previously we covered a bearish thesis on SoundHound AI, Inc. (SOUN) by Stefan Waldhauser in May 2025, which highlighted the company’s excessive cash burn, mounting losses, and unsustainable valuation driven by AI hype. The company’s stock price has appreciated approximately 30% since our coverage. This is because investor enthusiasm favored growth over fundamentals. The thesis still stands as concerns about profitability and valuation persist. Denis Gorbunov shares a contrarian view but emphasizes SoundHound’s accelerating revenues, strong balance sheet, and expanding partnerships.

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Disclosure: None.