Why SoundHound AI Stock Lost 39% Last Month

By Anders Bylund – Jan 7, 2026 at 10:10PM ESTKey PointsSoundHound AI stock dropped 39% in December despite announcing a significant OpenTable partnership.The selloff reflected a broader market rotation away from unprofitable growth stocks.Trading volume has fallen sharply and meme stock chatter has faded, suggesting the formation of a healthier investor base.We’re bullish on these 10 stocks ›NASDAQ: SOUNSoundHound AIMarket Cap$4.6BToday's Changeangle-down(-1.51%) $0.17Current Price$11.06Price as of January 7, 2026 at 4:00 PM ETWhat sent SoundHound AI stock tumbling last month? The answer has more to do with Wall Street's mood than the company's actual performance.Shares of SoundHound AI (SOUN 1.51%) fell 39.4% in December 2025, according to data from S&P Global Market Intelligence. The stock has been incredibly volatile over the last two years, and December continued that trend. Investors, analysts, and meme-stock traders alike are trying to find a reasonable price range for SoundHound AI's explosive but unprofitable business. ExpandNASDAQ: SOUNSoundHound AIToday's Change(-1.51%) $-0.17Current Price$11.06Key Data PointsMarket Cap$4.6BDay's Range$10.96 - $11.4952wk Range$6.52 - $22.17Volume23MAvg Vol32MGross Margin30.02% Good news, bad timing for SoundHound AI SoundHound AI didn't have bad news for investors last month. In fact, I would argue that the voice control specialist signed a pretty significant partnership that should have moved the stock upward. SoundHound AI integrated its hands-free restaurant booking systems with Booking Holdings (BKNG +1.82%) subsidiary OpenTable, adding more than 60,000 restaurant locations to its user-friendly booking tools. That sounds like a bullish move to me, but that day actually marked the start of December's price drops. That wasn't necessarily SoundHound AI's fault, though. The market as a whole stepped away from unprofitable growth stocks in the middle of December. SoundHound AI fits that higher-risk profile to a T, as the company only recently started to generate revenues from a large and growing backlog of long-term contracts. The company might not turn a bottom-line profit for several years, running its business on $269 million in debt-free cash reserves and the occasional stock sale. SoundHound AI posted 68% year-over-year revenue growth in November's Q3 2025 earnings report, proving its high-octane business growth trajectory. Still, Wall Street simply wasn't interested in this classic hypergrowth strategy last month.Advertisement Image source: Getty Images. The meme stock fog is finally lifting As of this writing on Jan. 7, SoundHound AI's stock is trading 50% below October's 52-week peak. Now and then, it acts like a classic meme stock by soaring on flimsy news or silly social media posting campaigns. But the online jibber-jabber has faded out, the daily trading volume fell 48% in three months, and the artificial price boost has gone away. These are classic signs of a former meme stock mania evolving into a healthier growth stock story. The company still has to follow through on the promise I see in it. Multi-year contracts will generate revenue and profits only if SoundHound AI delivers high-quality AI systems for voice-driven technologies. Resting on its laurels could result in larger rivals such as Microsoft (MSFT +1.04%) or Apple (AAPL 0.77%) catching up to SoundHound AI's lead in accurate interpretation. The risk is real, but the management team is experienced, competent, and innovative. Did you know that CEO Keyvan Mohajer has been getting business advice directly from Nvidia (NVDA +1.00%) CEO Jensen Huang for about a decade? As mentors go, that's a strong connection. These days, I'm more than comfortable with buying SoundHound AI shares. The company has been developing artificial intelligence (AI) tools for 20 years, and you can still be an early investor in its human-to-computer communication research.Read NextJan 7, 2026 •By Anders BylundIs SoundHound AI Stock a Buy Now?Jan 2, 2026 •By Justin PopeDown 56%, Should You Buy the Dip on SoundHound AI?Dec 31, 2025 •By Will EbiefungIs SoundHound Stock a Buy in 2026?Dec 29, 2025 •By Geoffrey SeilerThe "Second Derivative" AI Stocks: 3 Companies That Could Thrive Beyond Chips in 2026Dec 28, 2025 •By Bram BerkowitzDon't Buy SoundHound AI Stock Before You Read This WarningDec 26, 2025 •By John BromelsProtect Your Retirement: Avoid These 3 AI Stocks Right NowAbout the AuthorAnders Bylund is a contributing Motley Fool media and technology analyst covering semiconductors, cloud computing, internet infrastructure, quantum computing, and streaming media. Previously, Anders was a systems administrator for Nielsen Technology and CSX, gaining hands-on experience with enterprise-class systems. He was also a freelance writer for Ars Technica, TIME, USA Today, CNN, WIRED, and AOL's Daily Finance. He holds a bachelor’s degree in English and a master’s degree in library and information sciences from Florida State University. He believes in coyotes and time as an abstract.TMFZahrimX@TMFZahrimStocks MentionedSoundHound AINASDAQ: SOUN$11.06 (0.02%) $0.17AppleNASDAQ: AAPL$260.33 (0.01%) $2.03MicrosoftNASDAQ: MSFT$483.47 (+0.01%) $+4.96NvidiaNASDAQ: NVDA$189.11 (+0.01%) $+1.87Booking HoldingsNASDAQ: BKNG$5445.72 (+0.02%) $+97.33*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.Advertisement