SoundHound AI (NasdaqGM:SOUN) Removed From Multiple Russell Indexes

In recent developments, SoundHound AI (NasdaqGM:SOUN) was removed from several Russell indices, including the Russell Microcap and Russell 3000E, as of June 30, 2025, marking a key change in its market positioning. Over the last quarter, the company experienced a 20% price increase, partially supported by positive first-quarter earnings showing a significant year-over-year improvement in sales and net income, which helped counter broader market trends favoring tech stocks. Notably, SoundHound's recent partnerships, including those with Allina Health and Tencent Intelligent Mobility, likely provided added momentum amid a market environment that saw overall bullish sentiment in major indices like the Nasdaq and S&P 500.

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The recent removal of SoundHound AI from major Russell indices may influence investor perception by altering its visibility and liquidity in the market. Despite this change, the company's shares have shown remarkable resilience over the longer term, delivering a total return of 279.54% over the past three years. This strong performance contrasts its more recent 1-year returns, where the company surpassed the US market and software industry averages.

The announcement of new partnerships with industry leaders like Allina Health and Tencent Intelligent Mobility potentially supports positive sentiment and could drive revenue growth through expanded voice AI offerings. Analysts are optimistic about SoundHound AI's revenue, forecasting growth rates significantly above market averages. However, the company's dependency on high research and development costs and partner relationships could introduce financial volatility and affect earnings predictability.

The recent price movement, up 20% in the last quarter, narrows the discount to the consensus analyst price target of US$11.81, suggesting confidence in SoundHound's strategic direction, despite being currently priced below the target by approximately 20%. This ongoing upward trajectory highlights expectations for future growth and market realignment. Overall, while the removal from indices presents challenges, the company's innovative strategies and partnership expansions may counterbalance potential hurdles in achieving projected financial goals.

Evaluate SoundHound AI's historical performance by accessing our past performance report.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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