SoundHound AI (SOUN) experienced a remarkable surge on Friday, with shares climbing 20.1% to close at $9.56. Trading volume was exceptionally heavy, with 67.6 million shares changing hands, far exceeding the average daily volume. The rally comes just days before the company is scheduled to report its first-quarter earnings on May 7, and it was partly fueled by positive sentiment from the broader voice AI sector.
Twilio's Strong Results Lift Sector Sentiment
The upward momentum was largely driven by Twilio's (TWLO) impressive quarterly results and an upgraded 2026 revenue outlook. Twilio reported quarterly revenue of $1.41 billion, a 20% increase year-over-year, and raised its 2026 revenue growth target to 14%-15%, up from the previous 11.5%-12.5% range. Twilio CEO Khozema Shipchandler called it a “milestone quarter,” highlighting the strongest revenue and gross-profit growth rates in over three years. This positive news refocused investor attention on companies offering AI-powered communication solutions, including SoundHound.
SoundHound's Q1 Earnings Expectations
Analysts are closely watching SoundHound's upcoming earnings report, which is set to be released after the market close on Thursday, May 7. According to estimates from TipRanks, the company is expected to report a first-quarter loss of 10 cents per share on revenue of approximately $42.8 million. MarketBeat, however, lists consensus estimates at a loss of 5 cents per share and revenue of $42.56 million. The divergence in estimates underscores the uncertainty surrounding the company's path to profitability, but investors remain optimistic about its growth trajectory.
Financial Health and Outlook
In February, SoundHound reported 2025 revenue of $168.9 million, a 99% jump from the previous year. For 2026, the company has forecast revenue between $225 million and $260 million. As of the end of 2025, SoundHound held $248 million in cash and equivalents with no debt. However, the company posted a GAAP net loss of $14.0 million and a non-GAAP loss of $53.9 million for 2025, highlighting the ongoing challenge of achieving profitability despite strong top-line growth.
Recent Developments: Casey's Expansion and LivePerson Acquisition
On April 23, SoundHound announced that Casey's is rolling out its AI ordering agents to an additional 2,600 locations, following the technology handling over 21 million guest interactions. The partnership aims to enhance “quality and convenience” during peak hours, according to Casey's Chief Information Officer Sanjeev Satturu. Additionally, in April, SoundHound struck a deal to acquire LivePerson for $43 million in equity. The acquisition is expected to integrate digital messaging with SoundHound's voice technology, potentially unlocking up to $500 million in revenue potential with the current customer base. LivePerson CEO John Sabino noted that “the boundaries between ‘talking’ and ‘typing’ are disappearing.”
Analyst Views and Valuation
Scott Buck at H.C. Wainwright holds the highest price target on SoundHound, at $20 per share, according to TipRanks. He highlighted the company's push to reach adjusted EBITDA break-even by late 2026. However, SoundHound's valuation remains a point of concern. The stock trades at a trailing price-to-sales multiple of approximately 23, which is nearly double that of peer BigBear.ai (BBAI) at 11.63. Any earnings miss, softer guidance, or integration hiccups with LivePerson could lead to a sharp pullback, especially after the recent surge.
Market Context and Peer Comparison
BigBear.ai, another small-cap AI player, is scheduled to report its first-quarter results on Tuesday, May 5. Analysts project a loss of 8 cents per share on revenue of roughly $33.6 million. Unlike SoundHound, BigBear.ai focuses on defense, national security, and clients in travel and trade. The divergence in their business models and valuations makes SoundHound's upcoming report a critical test for the voice AI trade.
What to Watch
Friday's surge sends a strong signal, but the real test comes on Thursday. Investors are looking for evidence that voice AI demand is translating into real contracts and sustainable growth. The company must also demonstrate that it can manage its cash burn and move toward profitability. With the LivePerson acquisition still to be integrated and the Casey's expansion underway, SoundHound has several catalysts in play. However, with a high valuation and a history of losses, the stock remains a high-risk, high-reward bet.
