Morgan Stanley again adjusts its Fed forecast, now sees 4 cuts in 2026
On Friday, Cantor Fitzgerald reaffirmed a Neutral rating on SoundHound AI Inc. (NASDAQ:SOUN) with a set price target of $8.50. The firm’s analysis followed SoundHound AI’s report of a lower-than-expected revenue for the first quarter of 2025, attributing the shortfall to the deferral of an Amelia-related contract. Currently trading at $9.36, the company has seen a dramatic 105% return over the past year despite being down 51% year-to-date, reflecting the stock’s high volatility noted by InvestingPro analysts.
SoundHound AI’s Pillar One segment, which is heavily dependent on the automotive industry, performed as anticipated in the first quarter without being affected by tariffs. However, Cantor Fitzgerald anticipates that tariffs might have an impact on this segment in the remainder of 2025 and has slightly reduced its royalty forecasts for Pillar One as a result. With a market capitalization of $3.9 billion, InvestingPro data shows the company maintains strong liquidity with a current ratio of 3.77, providing some cushion against potential headwinds.
The company’s guidance for its Pillar Two Subscription revenue remains unchanged at $167 million for 2025. The forecast suggests a substantial increase in revenue for the second half of the year, with an estimated 80% growth in the latter half compared to the first half. This aligns with InvestingPro’s analysis, which forecasts 97% revenue growth for FY2025, though profitability remains a challenge with negative EBITDA of $95.7 million in the last twelve months. For deeper insights into SOUN’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. This expected growth is believed to be underpinned by SoundHound AI’s expansion of its sales force, concentrated efforts on Amelia partnerships, which saw strong performance in the first quarter, and a predicted increase in Amelia contract renewals in the second half of 2025.
Moreover, SoundHound AI is experiencing sequential growth in its Restaurant business, which is estimated to account for roughly 15% of total sales. The company sees ongoing growth opportunities in this vertical for the second half of the year. SoundHound AI’s commitment to expanding its Restaurant business and the overall optimistic outlook for Pillar Two Subscription and Amelia partnerships are key points highlighted by Cantor Fitzgerald in their analysis. Based on current metrics, InvestingPro’s Fair Value analysis suggests the stock is trading above its intrinsic value, with analysts setting price targets ranging from $8 to $26.
In other recent news, SoundHound AI Inc. reported its first-quarter 2025 earnings, showcasing a narrower-than-expected loss per share and a significant 151% year-over-year increase in revenue, reaching $29.1 million. Despite this growth, the revenue fell short of the $31.37 million forecast, raising concerns among investors. The company has set a revenue guidance between $157 million and $177 million for 2025, with an aim to achieve adjusted EBITDA profitability by the end of the year. SoundHound has expanded its market presence with new AI products and acquisitions, including SYNC3 and Amelia, which are anticipated to enhance its product offerings and market reach. The company also highlighted its strong pipeline, particularly in the automotive and restaurant sectors, where it sees substantial growth opportunities. Analysts from firms like D.A. Davidson and Joseph Gunnar have shown interest in SoundHound’s strategic moves and technological advancements. Additionally, SoundHound’s focus on voice commerce and agentic AI positions it as a key player in the evolving AI landscape. With no debt and cash reserves of $246 million, the company remains financially stable as it navigates a competitive market environment.
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