SoundHound AI Faces Key Support and Resistance Amid Mixed Technical and Fundamental Indicators

Technical Analysis

SoundHound AI (SOUN) closed at $10.53 on May 29, 2025, down 4.01%. The price tested support near $10.32 and faces resistance at $11.01. The Relative Strength Index (RSI) at 55 indicates a neutral momentum, while the MACD remains positive at 0.75, suggesting mild bullish pressure. The stock trades above both its 50-day ($9.27) and 200-day ($9.57) moving averages, indicating an ongoing short-to-medium term uptrend despite recent volatility. Average daily volume (29.77 million) is slightly below the current volume (36.58 million), reflecting above-average trading activity and possibly increased investor interest. The Average True Range (ATR) is relatively high at 8.00%, implying elevated price volatility. A key stop-loss level is identified near $10.02, just below immediate support.

For the next trading day (May 30), the stock may attempt to stabilize near support amid profit-taking following recent weakness. Momentum indicators and volume suggest a limited downside, with resistance around $11 likely to cap gains in the short term. Over the upcoming week, assuming no adverse news, the stock could oscillate between $10.30 and $11.00 as it consolidates ahead of earnings in mid-August. A break above $11.00 could signal further upside momentum.

Fundamental Analysis

SoundHound AI positions itself as a leader in the voice artificial intelligence sector, benefiting from increasing adoption of voice interfaces across automotive, healthcare, and IoT markets. Notably, a $1.2 billion automotive backlog provides pronounced revenue visibility, supporting foundational growth. Recent partnerships, such as the launch of the “Alli” AI agent with Allina Health, demonstrate expanding enterprise integrations and potential recurring revenue streams.

Financially, the company is in a hyper-growth phase with improving margins and a strong cash position, aiming for positive adjusted EBITDA by late 2024 or early 2025. However, trailing twelve-month earnings remain negative with an EPS of -$0.59 and an implied negative PE of -17.85, indicating the firm is not yet profitable. The Discounted Cash Flow (DCF) valuation is notably negative (-$10.45), reflecting current negative free cash flow and ongoing investment phases typical of growth-stage AI companies.

Consensus analyst targets place the stock at $13.00, representing a 23.5% upside from the May 29 close. Broker sentiment aggregates to a “Buy” consensus with no Sell ratings, underlining positive expectations about the company’s growth trajectory.

Intrinsic Value and Long-Term Potential

The significant gap between the negative DCF and the positive market valuation reflects early-stage operational challenges weighed against market optimism for AI-driven growth. The $1.2 billion backlog and diversified market penetration are critical drivers likely to improve cash flows and margins over the next 2-3 years. If SoundHound achieves sustainable operating profitability and continues expanding strategic partnerships, intrinsic value should trend upward materially. However, operational risks and unproven long-term profitability keep intrinsic valuation below current market price in the near term.

From a long-term investment standpoint, SoundHound’s focus on voice-AI in growing segments—particularly automotive and healthcare—positions it well in a niche with potentially durable competitive advantages. Sustained innovation, ability to scale, and margin expansion will be necessary to fulfill the bullish growth narrative.

Overall Evaluation

SoundHound AI currently exhibits characteristics of a growth-stage technology stock with moderate near-term volatility supported by strong technical trends and significant fundamental catalysts. The stock’s valuation reflects optimism about execution on its $1.2 billion backlog and emerging enterprise partnerships, despite ongoing losses and a negative intrinsic cash flow model. The consensus target price implies upside potential, balanced by execution risk and macro uncertainty in the AI sector.

Categorized as a Hold candidate, the stock merits monitoring for technical consolidation and operational progress. The relatively neutral technical indicators, combined with improving fundamental outlook but persistent losses, warrant caution against aggressive accumulation. Near-term price action around key support ($10.32) and resistance ($11.01) levels will be critical in signaling the stock’s directional bias ahead of earnings.