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​SoundHound AI, Inc. (NASDAQ:SOUN) is one of the AI Bubble Stocks to Short Now According to Reddit. SoundHound AI, Inc. (NASDAQ:SOUN) is among some of the most shorted stocks with a short float exceeding 38%. The stock has declined more than 16% since the release of fiscal Q1 2026 earnings on May 7. However, the Street continues to see significant upside, as 8 out of 10 analysts covering the stock have a Buy rating and the 12-month average price target reflects more than 67% upside from current levels.

During the fiscal first quarter of 2026, the company posted $44.2 million in revenue, reflecting a 52% year-over-year increase, and topped Wall Street’s expectation of $42.56 million. The EPS of negative $0.06 also fell short of the negative $0.03 consensus. Management noted the quarter to be strong, as excluding acquisitions, core automotive and IoT AI revenue surged 88%, reflecting organic demand across its key verticals.

​However, the profitability remained weak as SoundHound posted a GAAP net loss of $25 million and an adjusted EBITDA loss of $26.7 million. Gross margins were also impacted by one-time vendor charges during the quarter, although management flagged these as non-recurring.

After the quarter, the company agreed to acquire LivePerson, with the combined company expected to create one of the most comprehensive enterprise AI footprints in conversational AI, serving 25 of the Fortune 100. Management sees a $500 million revenue opportunity and is targeting 2027 revenue of at least $350 million to $400 million.

​SoundHound AI, Inc. (NASDAQ:SOUN) provides voice and conversational AI technology for automotive, restaurants, smart devices, customer service, healthcare, retail, financial services, and other enterprise markets.

While we acknowledge the potential of SOUN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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