SoundHound AI (NASDAQ: SOUN) extended its decline this week, touching its lowest level since November 2024 and marking a ninth consecutive weekly drop. The company’s market value has fallen from more than $8.79 billion in December 2024 to about $2.42 billion. At the same time, short interest has climbed to 40% of the public float, placing SoundHound among the more heavily shorted stocks in the US market.
The sell-off comes as the company continues to expand its business. SoundHound, which has received investment from Nvidia, acquired LivePerson for $43 million this year as it seeks to combine voice AI, intelligent agents and digital messaging services through its OASYS platform. Investors are now focused on whether the acquisition can be integrated effectively and whether SoundHound can absorb the execution costs while continuing to report losses.
Short interest reaches 40% of the float
Data shows that short positions account for about 40% of SoundHound’s public float. That level indicates that a significant portion of the market is positioned for further weakness and can amplify price volatility. A concentrated short covering could trigger a rapid rebound, but a high short-interest ratio alone does not establish a direction for the stock without a clear change in fundamentals or capital flows.
SoundHound’s shares have fallen nearly 80% from their peak, while the contraction in market value reflects a reassessment of the company’s valuation, earnings prospects and ability to sustain growth. The company initially attracted attention through its voice AI business, but as investors have raised their standards for AI companies’ revenue quality and pace of commercialisation, the stock’s performance has become less dependent on the broader AI theme.
LivePerson deal adds integration pressure
Following the LivePerson acquisition, SoundHound is seeking to combine voice interaction with digital messaging and offer a more complete AI service through OASYS. The $43 million transaction, however, does not mean revenue or profits will improve immediately.
With the company still operating at a loss, investors will be watching customer migration, product integration, sales synergies and post-acquisition operating costs. If integration takes longer than expected, the legacy voice business and the newly added messaging operations could compete for resources. Concerns about the transaction have also contributed to the pressure on the shares.
Revenue is growing, but at a slower pace
SoundHound’s second-quarter revenue increased 45% year over year. While that remains a strong rate of growth, it is below the pace recorded in several earlier quarters. For a highly valued AI company, slower revenue growth can affect how the market assesses future cash flow and valuation, particularly when profitability has not yet been established on a consistent basis.
Management expects full-year revenue of between $230 million and $260 million. The inclusion of LivePerson’s business could push the reported revenue total above that range. Whether additional revenue translates into stronger margins and cash flow will depend on the success of the integration, customer demand and control of operating expenses.
Shares break below $5.80 support
From a technical perspective, SOUN has fallen below the key support area near $5.80. The level formed the lower boundary of a descending triangle pattern, which traders often monitor when assessing whether a prevailing trend is likely to continue. The stock is currently below multiple moving averages, indicating weakness across both the short- and medium-term price trends.
The relative strength index, or RSI, recently fell to around 30, reaching that level for the first time since March 2026. An RSI near 30 generally signals heavy selling pressure, but it does not mean a rebound must follow immediately. Continued selling could push the shares lower, while the 40% short-interest ratio leaves room for a short squeeze if a large number of positions are covered at the same time.
Analysts’ price targets remain above the stock
Despite the prolonged decline, several analysts continue to set price targets above the current share price. DA Davidson has a $10 target, HC Wainwright has set a target of $20, and Cantor Fitzgerald has assigned a $15 target. These figures reflect analysts’ views on SoundHound’s revenue growth, integration of its AI platform and future commercialisation prospects; they do not indicate that the stock will necessarily reach those levels.
As of October 10, SoundHound was trading at about $5.40, down 2.17% on the day. Nvidia was trading at about $229.33, down 0.50%. Investors will continue to track SoundHound’s revenue delivery, operating data following the LivePerson acquisition, progress in narrowing losses and whether its high short interest leads to sharper price swings.