SoundHound AI Faces Volatility as Market Awaits Earnings Amid Legal Scrutiny and Technical Consolidation

Technical Analysis

SoundHound AI, Inc. (SOUN) closed at $9.79 on June 10, 2025, down 2.30% from the previous session. The stock tested a daily low of $9.76 and a high of $10.14, remaining close to its 200-day moving average of $9.76 and above the 50-day moving average of $9.33, suggesting a transitional phase between short- and long-term trend support. The RSI at 48 indicates a neutral momentum without clear overbought or oversold conditions. MACD remains positive at 0.18 over the last three months, reflecting modest bullish momentum despite recent retracement. Average True Range (ATR) is notably elevated at 7.49, indicative of higher intraday volatility, although this metric may partly reflect price range dynamics rather than directional conviction.

Support at $9.74 has been recently tested and held, while resistance at $11.01 represents a critical breakout zone that has yet to be challenged meaningfully. Volume on June 10 was 23.78 million, slightly below the average 28.56 million, reflecting modest participation during the pullback.

For the next trading day (June 11), the technical setup suggests that the stock may attempt stabilization around the $9.74-$9.79 range unless broader market catalysts emerge. Short-term upside is capped near $11.01 resistance, while failure to hold $9.74 could open a retest of lower bounds near $9.30–$9.00.

Over the upcoming week, given the neutral RSI and positive MACD, the expectation is a consolidation phase with potential for a gradual recovery toward the $11 resistance zone, especially if volume picks up and macro conditions remain supportive in the AI sector.

Fundamental Analysis

With a market capitalization of $3.93 billion, SoundHound AI is a small-cap player in the AI space, trading significantly below its 52-week high of $24.98 and well above its 52-week low of $3.82, illustrating a stock with wide price volatility. The company’s trailing twelve-month (TTM) earnings per share stand at -$0.61, resulting in a negative P/E ratio of -16.05, underscoring ongoing unprofitability as typical for growth-stage tech firms investing heavily in product development and market expansion.

Consensus analyst targets peg the stock at $13, about 33% above current levels, and the consensus rating is "Buy" based on 4 buys and 3 holds, indicating a generally positive market view tempered by caution in valuation and operational execution.

On the intrinsic value front, the company lacks profitability, making conventional earnings-based valuation challenging. Its fair valuation depends heavily on future revenue growth and margin expansion. The AI sector’s growth prospects provide a robust addressable market, but risk factors, including legal scrutiny as per the recent investigation by Bragar Eagel & Squire concerning potential breaches of fiduciary duties by management, cloud the near-term fundamental outlook and inject governance risk.

Earnings announcement is scheduled for August 14, 2025. This event is a key potential catalyst that could significantly influence sentiment depending on progress in revenue generation and cost management.

Long-term investors will need to weigh SoundHound AI’s disruptive potential in voice recognition and AI-driven technologies against its current financial losses and corporate governance uncertainties. If the company can leverage its product innovation to accelerate top-line growth and eventually achieve profitability, intrinsic value could align closer to or above the $13 target.

Overall Evaluation

SoundHound AI exhibits characteristics of an early-stage AI growth stock with notable volatility and elevated fundamental risks. The immediate technical picture implies a cautious near-term outlook with consolidation around current support levels. The mid-term trading range likely remains between $9.50 and $11, pending resolution of legal investigations and operational performance signals.

Given the negative earnings trajectory, pending legal issues, and relatively high volatility, SoundHound AI fits a risk-tolerant investor profile inclined toward growth with a long time horizon. The current price discounts significant uncertainties, yet the consensus price target and sector growth premise still afford upside potential if catalysts prove favorable.

Categorizing the stock as a *Hold* reflects that the current price reasonably accounts for near-term risks while maintaining upside tied to the company's platform execution and market adoption. Near-term downside is limited by technical support, but fundamental headwinds and legal risks preclude a clear Buy classification at this juncture. A Sell perspective is mitigated by strong sector dynamics and analyst sentiment.

In summary, SoundHound AI holds a volatile but credible growth narrative, with the next week likely dominated by consolidation and caution, while longer-term prospects hinge on execution and risk resolution ahead of the August earnings release.