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Oppenheimer has started coverage of SoundHound AI with a Perform rating. The firm said the voice AI company has strong technology and a clear lead in certain areas, but also faces big risks from competition and its current valuation.
The analysts described SoundHound as a pioneer in conversational AI, pointing to its strengths in speech-to-meaning technology, data science, and analytics of unstructured information. The company has already carved out a role in industries like autos and quick-service restaurants, giving it a strong position as more businesses turn to voice AI.
Oppenheimer noted that SoundHound’s backlog of signed contracts is more than 20 times its subscription revenue at the start of this year. That pipeline supports long-term growth and shows strong demand for its services. The firm also praised the company’s management and business execution.
Even so, analysts warned that competition could intensify. Large equipment makers, enterprise software providers, and developers of large language models are all moving into voice technology. That could cut into SoundHound’s early lead.
Another concern is valuation. Oppenheimer said investor expectations look too aggressive, with SoundHound trading at 26 times its projected 2026 revenue. They worry that growth in new markets may not keep up with the optimism baked into the stock price.
Still, the firm sees growth opportunities in product innovation, upselling to existing customers, expanding overseas, and possible acquisitions. But it also cautioned that bigger rivals, with deeper pockets, could bundle voice technology into larger platforms, which may turn the market into a commodity business.
For now, Oppenheimer remains cautious. While SoundHound has promising technology and strong momentum, the risks make it difficult to recommend the stock at current levels.