SoundHound AI has been a popular investment in the AI sector over the past year. The stock rose more than 350% since the start of 2024, although it was up over 1,000% in December. The downfall occurred partly because Nvidia sold its entire stake in SoundHound AI, and the broader AI sell-off also affected the stock.
For an investment to turn $10,000 into $1 million, it must increase in value by 100 times. SoundHound AI has a market cap of $3.9 billion, so it would need to become an almost $400 billion company to make you a millionaire from a $10,000 investment. That’s a tall order, as examples of $400 billion companies include giants like Procter & Gamble.
SoundHound AI focuses on audio inputs instead of text inputs in AI models. This caused SoundHound’s revenue to rapidly grow, increasing by 101% to $34.5 million in Q4. That growth is expected to persist throughout 2025, with management guiding for $157 million to $177 million in revenue, which indicates 97% growth at the midpoint.
One metric management provides investors is the revenue backlog, which measures the remaining value of the contracts it has signed.
SoundHound’s impressive revenue growth
At the end of Q4, this figure stood at $1.2 billion.
Even if you subtract the 2025 revenue prediction, that leaves over $1 billion in remaining contract value, indicating that SoundHound will likely see this explosive growth continue for a few more years. Despite being down by 60% from its all-time high, SoundHound’s stock isn’t cheap. It still trades at a premium higher than the usual 10 to 20 times sales that software companies typically trade around.
However, most software companies aren’t doubling their revenue year over year. If SoundHound doubles its revenue this year as management predicts, this premium will be reduced to around 20 times sales. So, what can investors expect from SoundHound’s stock?
It all boils down to what the company does from 2026 to 2030. The 2025 growth appears to be already priced into the stock price, but if SoundHound can deliver another year of revenue doubling in 2026, the stock price could easily double in response, and the same applies for any year beyond that. That might not be enough to turn $10,000 into $1 million, but it is sufficient for a successful investment and to boost your portfolio returns.
Hence, it might be worthwhile to take a swing at SoundHound’s stock at these prices, but due to the inherent risks involved, keep the position size fairly small.
Image Credits: Photo by James Kovin on Unsplash
Rashan is a seasoned technology journalist and visionary leader serving as the Editor-in-Chief of DevX.com, a leading online publication focused on software development, programming languages, and emerging technologies. With his deep expertise in the tech industry and her passion for empowering developers, Rashan has transformed DevX.com into a vibrant hub of knowledge and innovation. Reach out to Rashan at [email protected]
