SoundHound AI Inc. (NASDAQ:SOUN) shares fell 6.4% on Wednesday, July 29, 2026, closing at $5.84 and touching a new 52-week low of $5.795 during regular trading on the Nasdaq. The decline occurred despite a positive customer announcement from MUSC Health, which expanded the deployment of SoundHound's AI agent, Emily, to its retail and specialty pharmacy locations. Since 2024, the platform has managed over 2.2 million patient calls, according to a press release from GlobeNewswire.
The healthcare rollout includes new features for prescription refills, status updates, and pharmacy call transfers. Crystal Broj, digital transformation lead at MUSC Health, stated that the platform “delivers measurable efficiencies while maintaining the high level of service our patients expect.” However, the announcement did not disclose the contract value, revenue impact, or margin details, leaving investors without key unit economics.
SoundHound’s current equity stands at $2.51 billion, which is 10.4 times its projected 2026 revenue at the median guidance figure of $225 million to $260 million. The broader market also pressured the stock, with the Invesco QQQ Trust (NASDAQ:QQQ) falling 0.8% and voice software peer Cerence Inc. (NASDAQ:CRNC) dropping 3.3%.
Merger with LivePerson
The decline comes amid the company’s planned acquisition of LivePerson (NASDAQ:LPSN), which could provide a faster path to scaling. Preliminary calculations indicate that pro forma first-quarter revenue for the combined entity would be $101.2 million, more than double SoundHound’s standalone $44.2 million. However, the deal would dilute the share count by approximately 10%, adding 42.6 million shares at the current stock price. The pro forma equity value is estimated at $2.76 billion, representing 6.8 times annualized revenue.
LivePerson reported pro forma first-quarter revenue of $57.0 million, surpassing SoundHound’s $44.2 million. The scale is driven by a seller under pressure, as LivePerson disclosed that its debt exceeds the combined value of the deal. CEO John Sabino cautioned that the stock may have “little or nothing” in value if the agreement is not ratified, according to a PR Newswire release.
Financial Performance and Risks
SoundHound’s first-quarter revenue grew 52% year-over-year to $44.2 million, but GAAP gross margin declined by 5.4 percentage points to 31.1%. Operating cash outflow expanded to $26.3 million from $19.2 million in the prior year. The company held $216 million in cash at the end of March and reported no outstanding debt, providing an extended runway but not guaranteeing improved returns.
Key risks include the pending LivePerson shareholder vote, with a deadline of August 19 and a special meeting set for August 20. LivePerson plans an investor town hall at 8 a.m. EDT on August 5. Additionally, SoundHound disclosed material weaknesses in its internal controls over financial reporting as of March 31. The planned share offering will result in dilution for existing shareholders.
SoundHound is scheduled to release its second-quarter earnings at 5 p.m. EDT on the same day as the LivePerson town hall. The market will be watching to see if increasing usage translates into higher-quality revenue. While adoption of the AI platform is growing, investors continue to require evidence of sustainable revenue generation.
