Short Squeeze And Earnings: Why SoundHound AI Stock Spiked Thursday
SoundHound AI Inc. (NASDAQ:SOUN) stock surged more than 26% in Thursday’s premarket session after the conversational AI company reported stronger-than-expected second-quarter results and raised its full-year 2026 revenue guidance.
The rally was likely fueled by a short squeeze, with 42.35% of SoundHound AI’s public float, or about 169.2 million shares, sold short. The elevated short interest suggests a large number of investors were betting against the stock, forcing some to cover their positions as shares surged.
SoundHound AI Q2 Results Beat Expectations
Revenue increased 45% year over year to $61.9 million, topping the analyst consensus estimate of $52.39 million. The company attributed the growth to strong demand across enterprise AI, healthcare, automotive, financial services, technology and other end markets.
SoundHound reported an adjusted loss of 2 cents per share, beating analysts’ expectations for a loss of 6 cents per share, according to Benzinga Pro.
Adjusted gross margin was 58.4%, unchanged from a year earlier but up 8 percentage points sequentially. Adjusted EBITDA loss narrowed 33% year over year to $9.6 million. The company ended the quarter with $203 million in cash and cash equivalents.
Management said its OASYS agentic AI platform became a major growth driver during the quarter by improving customer conversion rates, increasing win rates and shortening sales cycles. The company also secured an eight-figure customer commitment within 90 days of an initial OASYS demonstration.
Partnerships Fuel Expansion
Asia remained a key growth market, with SoundHound securing major deals for a fifth consecutive quarter. The company signed new partnerships with Chinese and Indian automotive and technology companies for agentic AI, IoT and large language model-powered voice solutions. It also expanded collaborations with global automakers, including Stellantis and Hyundai.
The company is also expanding into voice commerce. Upcoming pilot programs will enable AI-powered in-car transactions through OASYS and direct purchases through smart TVs with a global electronics partner.
Meanwhile, SoundHound’s restaurant and small-business AI segment continued to grow. Smart Answering revenue more than doubled from a year earlier, the company added three new U.S. restaurant customers and maintained a 100% renewal rate among key accounts.
The company also said it expects its acquisition of LivePerson to close by the end of 2026, expanding its enterprise reach and strengthening its conversational AI platform.
SoundHound AI FY26 Outlook Raised
SoundHound raised its fiscal 2026 revenue guidance to a range of $230 million to $260 million from its previous forecast of $225 million to $260 million. The midpoint of the updated range is above the analyst consensus estimate of $232.2 million.
Management also pointed to the long-term potential of agentic AI, citing Gartner’s forecast that software spending in the category could approach $1 trillion by 2030. The company said it expects gross margins to eventually exceed 70% as acquisition synergies materialize and more customers adopt its proprietary AI platform.
SOUN Price Action: SoundHound AI shares were up 26.44% at $8.13 during premarket trading on Thursday, according to Benzinga Pro data.
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