SoundHound AI shares have dropped 16.9% over the past three months, underperforming its Zacks sub-industry, the broader tech sector, and the S&P 500, even as the company reported record second-quarter revenue of $61.9 million, up 45% year over year and 17.9% above the Zacks Consensus Estimate. GAAP gross margin expanded to 45.1% from 39% a year earlier, and adjusted EBITDA loss narrowed to $9.6 million from $14.3 million, though a GAAP net loss of $42.8 million and widening operating cash use of $60 million in the first half of 2026 kept profitability elusive. Management raised its 2026 revenue outlook to a range of $230 million to $260 million, while the company raised about $48.5 million through Class A common-stock sales, increasing shares outstanding to 403.3 million. The stock trades at 12.0 times forward sales, a premium to the sector and S&P 500, and carries a Zacks Rank #3 (Hold) with weak Style Scores.
