SoundHound AI (SOUN) shares experienced a significant rally on Friday, climbing 20.1% to close at $9.56. This surge pushed the company's market capitalization to approximately $3.94 billion, drawing attention from traders and investors alike. The move comes just days before the company is scheduled to report its first-quarter earnings after the market close on May 7, followed by a conference call at 5 p.m. ET.
Short Squeeze Speculation Intensifies
The rally was not fueled by any new corporate announcements but rather by growing speculation of a short squeeze. According to data from MarketBeat, as of April 15, roughly 146.6 million shares of SoundHound were sold short, representing 38.18% of the public float. This elevated short interest means that short sellers would need approximately 7.5 days to cover their positions based on average trading volume. Momentum traders piled in, anticipating that short sellers scrambling to cover losing bets could drive the stock even higher.
Key Catalysts: Casey's Expansion and LivePerson Acquisition
Beyond the short-term trading dynamics, SoundHound has been making strategic moves to bolster its business. On April 23, the company expanded its partnership with Casey's General Stores, deploying its AI-powered ordering agents to over 2,600 locations. The system, which has already handled more than 21 million guest interactions, allows customers to place food orders and ask basic menu questions through voice-activated automation. Casey's CIO Sanjeev Satturu described the move as scaling a proven solution that benefits both customers and staff.
Additionally, on April 21, SoundHound announced a pending acquisition of LivePerson's assets, aiming to integrate its voice and agentic AI technology with LivePerson's chat and messaging suite. LivePerson CEO John Sabino noted that the artificial boundaries between talking and typing are disappearing, highlighting the potential of the combined offering. However, the deal remains subject to several conditions, including approval from LivePerson stockholders, Nasdaq clearance for the issuance of SoundHound shares, effectiveness of SoundHound's registration statement, and completion of LivePerson's note-restructuring transactions.
Financial Performance and Outlook
SoundHound reported 2025 revenue of $168.9 million, nearly doubling from the prior year with a 99% increase. Looking ahead, the company projects 2026 revenue in the range of $225 million to $260 million. However, the company reported an adjusted EBITDA loss of $58.4 million for the year. As of December, SoundHound held $248 million in cash and cash equivalents with no debt on its balance sheet.
Risks and Management Changes
The rally carries risks, particularly if the upcoming earnings report fails to meet elevated expectations. A trade heavily reliant on positioning could unwind quickly. Furthermore, the company recently experienced a change in its executive team. In March, CFO Nitesh Sharan stepped down for personal reasons, effective April 3. Co-founder James Hom has stepped in as interim CFO while the company searches for a permanent replacement.
All eyes are now on the May 7 earnings report. Investors are eager to see whether the Casey's rollout, the LivePerson acquisition plan, and the broader push into AI-driven customer service software can translate into consistent revenue growth, rather than just fueling another volatile swing in SOUN stock.
