SoundHound AI Inc (SOUN) shares plunged 5.03% in pre-market trading on Friday, as investors reacted to the company's disappointing first-quarter earnings report and subsequent analyst downgrades. The voice-based AI company, which has been under pressure since Nvidia's stake sale earlier this year, failed to meet Wall Street's expectations despite posting record quarterly results.

SoundHound reported Q1 revenue of $29.1 million, representing a 151% year-over-year increase. However, this fell short of the $30.4 million consensus estimate from analysts. The company's adjusted loss of 6 cents per share was in line with expectations. In response to the earnings miss, Wedbush cut its price target on SoundHound AI from $22 to $15, while maintaining an Outperform rating. Ladenburg Thalmann & Co. reaffirmed its Hold rating on the stock.

Despite the setback, SoundHound AI remains optimistic about its future prospects. The company reaffirmed its full-year revenue guidance of $157 million to $177 million and highlighted its strong cash position of $246 million with no debt. CEO Keyvan Mohajer emphasized the company's expanding reach in real-world AI applications, including the release of its complete AI agent platform. However, investors seem to be taking a cautious stance, as reflected in the stock's significant year-to-date decline of over 50%.