SoundHound AI shares closed at $8.17 on Friday, down 14 cents, marking the stock's lowest level since May 18. The voice-AI company's stock lost approximately 2.9% for the week, underperforming the Nasdaq Composite's 0.5% gain during the same period. Trading volume reached about 32.9 million shares, with the stock fluctuating between $8.09 and $8.83.
U.S. markets will be closed Monday for Memorial Day, with trading set to resume Tuesday. Investors are expected to react to Friday's selloff, the company's recent shareholder meeting, and broader market direction when trading resumes.
Financial Performance and Challenges
SoundHound reported first-quarter revenue of $44.2 million, a 52% increase year-over-year. However, the company's net loss widened to $25.0 million, with adjusted EBITDA showing a loss of $26.7 million. Adjusted EBITDA excludes interest, tax, depreciation, amortization, and some other items. Investors are weighing whether to pay for growth while SoundHound continues to burn cash and pursue new acquisitions.
CEO Keyvan Mohajer stated earlier this month that the company started the year strong, as its core automotive and IoT AI business jumped 88% excluding acquisitions. Co-founder and interim CFO James Hom noted that SoundHound ended the quarter with a strong balance sheet.
LivePerson Acquisition
SoundHound announced in April its plan to acquire LivePerson in an all-equity deal valued at $43 million. The company expects its voice and agentic AI to integrate with LivePerson's messaging platform. Agentic AI refers to software that performs tasks, not just answer prompts. The deal is expected to close in the second half of 2026, subject to approvals and customary closing conditions.
SoundHound says combining with LivePerson would target a $500 million revenue opportunity from existing clients. Mohajer called the two companies complementary conversational AI pioneers, while LivePerson CEO John Sabino remarked that the boundaries between talking and typing are disappearing.
Analyst Scrutiny and Competition
Analysts have pressed SoundHound about its M&A strategy. On the May 7 earnings call, D.A. Davidson analyst Gil Luria noted that SoundHound's acquisition approach differs from how most public tech firms buy smaller, fast-moving companies at steep prices. Mohajer responded that rolling out enterprise AI can take time and that the right customer connections can make a purchase worthwhile.
Competition remains tight. LivePerson gives SoundHound more room in enterprise messaging, while Cerence remains a rival in automotive voice AI, selling conversational and agentic AI to automakers and mobility businesses. SoundHound's filing notes the plan is also to operate outside big-tech voice ecosystems, letting customers own their brands, user experience, and data.
New Platform and Financial Risks
SoundHound is launching OASYS, a new platform for developing and managing AI agents across different channels. According to the company, OASYS covers creation, orchestration, evaluation, and agent improvement. Hayley Sutherland, research manager for conversational AI at IDC, said such platforms are more important now as requirements for governance and guardrails evolve.
However, the company faces significant financial challenges. In its latest quarterly report, SoundHound disclosed steady losses and negative operating cash flow since launch, with an accumulated deficit of $982.1 million as of March 31. The company said it may seek more debt or issue stock, and pointed to ongoing material weaknesses in internal controls over financial reporting. On May 11, SoundHound filed a shelf registration for an at-the-market program that could issue up to $300 million in Class A common shares over time.
Market Outlook
Market focus shifts to Tuesday next week as buyers weigh whether Friday's selloff is merely exhaustion after a wave of filings and deal news, or if concerns about losses, dilution, and integration risk are coming back into play. The Nasdaq ended the week higher, but SoundHound slipped.
