Stock-Split Watch: Is SoundHound AI Next?
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By Bram Berkowitz – Dec 16, 2025 at 9:30AM ESTKey PointsStock splits are tools that companies use to adjust their share price and outstanding share count.Companies often conduct stock splits after a stock has made a big move higher or lower.SoundHound has seen its stock price fall sharply, making it a potential stock-split candidate.These 10 Stocks Could Mint the Next Wave of Millionaires ›NASDAQ: SOUNSoundHound AIMarket Cap$4.5BToday's Changeangle-down(-7.38%) $0.86Current Price$10.79Price as of December 15, 2025 at 4:00 PM ETStock splits can help companies increase liquidity or rejuvenate investor interest.Stock splits are an occasional tool used by companies to adjust their share price and outstanding share count without changing their overall market cap. The equity value remains unchanged, but management may consider artificially adjusting the share price to make it more appealing to retail investors. The conversational artificial intelligence company SoundHound AI (SOUN 7.38%) has benefited from the rise of the technology in recent years but is also experiencing a challenging year that has sent its stock price sharply downward. Could a stock split be in its future? What drives stock splits I want to reiterate that a stock split does not change a company's overall market capitalization, and therefore it does not alter an investor's total equity position. So when shareholders see a company they own announce a split, they shouldn't be concerned that it will change their position's value. Image source: Getty Images. Let's take an example. Say an investor owns 2,000 shares of a stock trading at $500 per share for a total equity position of $1 million. Then that company announces a traditional 2-for-1 stock split, meaning investors receive two shares for each share they own. The investor would then own 4,000 shares at a share price to $250, so the equity position's total value remains unchanged. Companies typically conduct traditional stock splits to lower their share price and make the stock seem more accessible to retail investors. Increasing the outstanding share count can also boost liquidity.Advertisement Reverse stock splits do the opposite, increasing a company's share price while reducing the number of shares outstanding. Investors will often see companies resort to this when the stock risks breaching compliance rules with a large stock exchange, such as the Nasdaq or the New York Stock Exchange. Both exchanges will send members a deficiency notice if their stocks trade below $1 per share for 30 consecutive trading days. A reverse split can help companies regain compliance if they believe they can turn things around and want to remain on a highly liquid exchange, where they have the best exposure to a broad group of investors. Will SoundHound AI soon conduct a stock split? SoundHound has developed voice and conversational AI that helps companies enhance their operations and provide customers with better experiences. The company's solutions can be used to enhance customer service, automate food delivery, and integrate generative-AI voice capabilities into automobiles. While SoundHound is down roughly 38% this year (as of Dec. 9), the stock is still up close to 92% over the past five years, as many investors are still bullish on the company's AI. However, it's easy to see why some investors might have concerns. The company trades at a market capitalization of over $5 billion but has an accumulated deficit of nearly $1 billion, representing the total losses incurred since its inception in 2005. ExpandNASDAQ: SOUNSoundHound AIToday's Change(-7.38%) $-0.86Current Price$10.79Key Data PointsMarket Cap$4.5BDay's Range$10.72 - $11.7052wk Range$6.52 - $24.98Volume459KAvg Vol44MGross Margin30.02% The company has grown its revenue strongly this year but is still losing money, so it trades at a monster valuation. However, the market is aware of this and, as with many companies using AI, is betting that the technology will succeed and that the business can capture market share quickly, which will eventually lead to robust profitability. Nonetheless, it is still a bet with no guarantee of success. That said, I see no imperative need for SoundHound to conduct a reverse stock split. The stock trades around $12.40 per share and is well in compliance with Nasdaq listing requirements. Furthermore, most of the company's outstanding shares are publicly held, so there is no pressing need to boost liquidity. A large portion of the public float is being borrowed to short the stock, but this doesn't necessarily mean that a split is warranted.About the AuthorBram Berkowitz is a contributing Motley Fool stock market analyst covering financials, technology, consumer goods, and macroeconomic trends.
Before The Motley Fool, Bram worked in equity research covering bank stocks and as a reporter for local publications. He holds FINRA Series 7 and 66 licenses, as well as a bachelor’s degree in business with a minor in economics from Syracuse University.TMFBramX@BramBerkoRead NextDec 15, 2025 •By Keithen DruryThis AI Stock Could Deliver Life-Changing Returns Over the Next DecadeDec 14, 2025 •By Keithen DruryIs SoundHound a Top AI Stock for 2026?Dec 12, 2025 •By Leo Sun3 Breakout Growth Stocks You Can Buy and Hold for the Next DecadeDec 11, 2025 •By Anders BylundThink It's Too Late to Buy SoundHound AI Stock? Here's the 1 Reason Why There's Still Time.Dec 11, 2025 •By Keithen Drury2 Genius Stocks That Could Double in 2026Dec 11, 2025 •By John BallardSoundHound AI: Where Will This Stock Be in 5 Years?