Nvidia-linked shares rallied in Friday trading. SoundHound AI rose 21%; Nebius, CoreWeave up 7%; Innoviz up 3%; RXRX, Arbe Robotics up 2%; Aurora Innovation up 1%.
Shares of SoundHound surged on Friday after second quarter results beat estimates and the company raised its outlook, drawing largely positive views from Wall Street analysts.
Wedbush maintained its Outperform rating and raised the price target on the stock to $16 from $15 "reflecting increased confidence in the SOUN growth story heading into 2H25 & beyond."
Analysts led by Daniel Ives said SoundHound's total revenue of $42.7M (up 217% year-over-year) came in well above the Street’s estimate of $32.9M driven by new logo wins and increased cross-sell deals across automotive, restaurants, and voice commerce while also seeing further cross-selling with Amelia, the company's conversational AI platform.
The analysts added that SoundHound slightly raised its 2025 guidance to $160M to $178M (prioroutlook of $157M to $177M) which they believe is conservative as demand remains strong across all vertical as it continues to expand channel partner relationships which are further accelerating growth.
"Overall, we believe this was a major step in the right direction for the SOUN story, with strong demand heading into FY25 across all verticals as the company remains an under-appreciated pure-play AI company that is making significant strides in taking share across all verticals," said Ives and his team.
Piper Sandler reiterated its Neutral rating on SoundHound and its $12 price target.
"We are encouraged that SoundHound saw the normalized growth underneath, right ahead of Amelia turning organic this month, and that profitability/GPMs came in much better than anticipated. We remain constructive on the long-term opportunities, but see a balanced risk-reward," said analysts led by James Fish.
Cantor kept its Neutral rating on SoundHound with an $8.50 price target.
Analysts led by Thomas Blakey said SoundHound AI reported a strong second quarter driven by organic growth quarter-over-quarter, including a new China-based win in Auto/Pillar One, solid close rates in Pillar Two (Enterprise subscription deals), and continued traction with expanding Average Revenue Per User, or ARPU, locations, and usage across its platform.
However, the analysts added that, the company's management noted lumpiness/uncertainty in close rates into the second half of the year not flowing through its relatively large second quater beat.
From a tariff perspective, production volumes are flattish to slightly down given trade pressures and embedded in the guidance. Voice Commerce remains early, with continued growth in pipeline,and we continue to model no revenue here in 2025, the analysts noted.
"We remain Neutral rated on SOUN shares given valuation ($8.50 PT is 15x C26 sales) despite our view that the company is well positioned to benefit from secular shifts in digital voice-based interactions, including customer service and commerce," said Blakey and his team.