Investment bank Wedbush stated that SoundHound AI Inc's (SOUN.US) latest earnings and guidance lay the foundation for the next phase of its AI-driven growth. The firm maintained its "Outperform" rating on the stock with an $18 price target, representing a 26% upside from Thursday's closing price of $14.23.

SoundHound AI reported Q3 revenue of $42.049 million, up 68% year-over-year. Non-GAAP gross profit rose 66% to $24.917 million, while adjusted EBITDA improved to -$145 million from -$159 million in the prior-year period. Net losses narrowed to $130 million from $150 million.

The company raised its full-year 2025 revenue forecast to a range of $165-$180 million. Wedbush analysts led by Dan Ives noted: "SoundHound AI's modest guidance increase to $165-$180 million (from $160-$178 million) appears conservative given sustained strong demand across verticals - with automotive showing slight improvement while other sectors maintain robust growth."

Analysts added: "Overall, we view this earnings release as another positive step in SoundHound AI's growth narrative. Despite intensifying competition and macroeconomic uncertainty, the company continues demonstrating strong monetization capabilities across multiple high-TAM AI markets while progressing toward profitable growth."