We recently published a list of Why These 15 Software Stocks Are Plunging In 2025. In this article, we are going to take a look at where SoundHound AI Inc (NASDAQ:SOUN) stands against other software stocks that are plunging in 2025.
The software sector has been anything but calm lately. These stocks were the darlings of Wall Street for the past few years but are now taking a beating due to tariff-related uncertainty and worries about AI’s lack of profitability.
News headlines have been almost entirely negative in the past two months due to weak macro data and big companies’ disappointing earnings results. This has caused a pivot toward profitability over growth.
Volatility often hides opportunity, and many of these software stocks are now oversold and can rebound when sentiment shifts. As such, it’s worth looking into the stocks that have plunged the most.
Methodology
For this article, I screened the worst-performing software stocks year-to-date.
I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A software engineer focused on a computer screen, writing code to create a conversational assistant.
SoundHound AI Inc (NASDAQ:SOUN)
Number of Hedge Fund Holders In Q4 2024: 21
SoundHound AI Inc (NASDAQ:SOUN) makes voice artificial intelligence solutions and sells them to businesses.
The stock is down significantly so far in 2025 due to SoundHound’s struggle with consistent revenue growth in its core business.
The company reported a record Q4 2024 revenue of $34.5 million, up 101% year-over-year. Revenue from its original operations, excluding 2024 acquisitions, has weakened. This inconsistency has raised red flags for investors who expected sustained organic growth.
Profitability remains elusive for SoundHound, and this has added pressure on the stock. The company posted a GAAP net loss of $351.10 million in 2024, a 282.8% increase from 2023, despite revenue growth to $84.69 million. Investors are wary because the firm has yet to achieve positive earnings, even though management aims for adjusted EBITDA positivity by the end of 2025.
The consensus price target of $12.86 implies 30.4% upside.
SOUN stock is down 50.30% year-to-date.
Overall, SOUN ranks 8th on our list of software stocks that are plunging in 2025. While we acknowledge the potential of SOUN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SOUN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
