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This Week's Exclusive Article
SoundHound’s Bottom Is In—Inflection and 50% Upside Ahead?Written by Thomas Hughes. Date Posted: 5/8/2026. 
Key Points
- SoundHound isn't out of the weeds by a long shot but is on track to gain momentum in 2026.
- Acquisitions and new products position it as a voice-activated agentic AI winner.
- Analysts are optimistic, and institutions are accumulating, setting the stage for a short-covering rally and potentially a squeeze.
- Special Report: Elon Musk: This Could Turn $100 into $100,000
SoundHound’s (NASDAQ: SOUN) stock price appears to have bottomed earlier this year and may be on track to reverse course. While persistent issues such as cash burn remain, the company appears to be gaining traction and has a significant acquisition ahead. The LivePerson AcquisitionLivePerson is a conversational cloud AI platform whose business is driven by a messaging platform that enables brands to converse with consumers across channels.
The benefits of SoundHound's acquisition of LivePerson are substantial, including expanded reach, enhanced services, cost-saving opportunities, technological advancements, and accelerated growth. LivePerson’s portfolio includes hundreds of top-tier global brands, including airlines and financial institutions, thereby expanding its reach and cross-sell opportunities. If the acquisition closes as expected, the merged company will provide unified voice and digital messaging across the communications ecosystem. The combination is expected to accelerate and sustain growth, as its pooled data will enhance AI training and improve accuracy. Path to ProfitabilityUltimately, the combination is expected to accelerate sustainable growth while improving the path to profitability. As it stands, the outlook for profits is mixed. Company executives are forecasting an inflection in profits by early 2027, while many analysts don’t expect sustainable profitability until 2028. The takeaway for investors is that ample uncertainty remains, but the risk is to the upside, given the ultra-low stock price, the recent acquisition of Amelia, and the launch of the firm's OASYS product. Amelia enables voice-activated, automated customer service and employee-facing interactions, including agentic AI capabilities. It expanded SoundHound’s services beyond simple customer interactions, delivering enterprise-grade agentic capabilities. OASYS is a self-learning, agentic AI platform that enables quick, easy agentic AI development, deployment, and upgrading. Its key feature is its self-learning capability, enabling the system to learn from new data, build AI, and improve agentic operations over time. Mixed Quarterly Results Send SoundHound LowerSoundHound had a decent Q1 despite the mixed bottom-line result and the market reaction. The company reported $44.2 million in net revenue, up nearly 52% year-over-year (YOY) and 375 basis points (bps) better than expected. The strength was driven by all verticals and categories, with notable strength in the core business. Automotive and Internet of Things (IoT) grew by nearly 90%, adjusted for acquisitions, underscoring the strength of the business model. New customers are becoming long-term customers and increasing their use of the service. Margin was a mixed bag, with adjusted gross margin strong at 49.7% and adjusted EBITDA still in the red. However, non-recurring items related to the growth strategy are to blame, and guidance is more robust. The company reaffirmed its revenue target, expecting $242.5 million at the midpoint, above analyst consensus, and forecasting robust growth for the remainder of the year. Cautious Analysts Forecast 50% Upside: Institutions Buy Into the OutlookThe analyst response following the release aligned with 2026 analyst activity, showing caution amid continued losses but optimism about the future. The 10 analysts tracked by MarketBeat carry a consensus Moderate Buy rating, with a 60% buy-side bias and more than 70% upside at the consensus target. Assuming traction becomes evident in the coming quarters, particularly regarding the LivePerson acquisition and the path to profitability, sentiment will likely improve, strengthening the catalyst. Institutions are buying into the outlook despite near-term headwinds. MarketBeat data shows the group owning only 20% of the stock but accumulating at a robust, approximately $3-to-$1 pace over the trailing 12 months. Activity was strong in Q1 2026, the trend extended into early Q2, and it will likely remain positive as the year progresses. The biggest risk is that SoundHound fails to execute its strategy, including the acquisition of LivePerson, in which case the stock's downside could be substantial. Short Sellers See Risk and Opportunity in SoundHound StockShort sellers are leaning hard into the SoundHound trade. Activity has ramped over the past two years, driving short interest to approximately 40% of the stock and creating a significant headwind for the market action. With this in place, upside in the stock price is limited, but a catalyst for short covering is in the works. Aside from the LivePerson acquisition, SoundHound is well-positioned to gain traction in the current and upcoming quarters; add in the LivePerson acquisition, and short covering could easily become a squeeze. In this scenario, SOUN price action could revert to the analysts’ consensus target, near the midpoint of the long-term trading range. The technical action is bullish, suggesting that short covering may already be underway. The market is forming a Head & Shoulders pattern, setting up to confirm the second shoulder with the post-release price dip. The likely outcome is that support near $8 is confirmed, and a rebound quickly follows. 
The critical resistance point is the pattern's neckline, which supports a bullish bias. A move above $9.75/$10 may be the technical trigger to accelerate short covering. |
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