SoundHound AI Inc (NASDAQ: SOUN) is inching down in premarket on Wednesday after famed investor Jim Cramer called it a “meme stock” in a response to a caller’s query about the artificial intelligence firm.
Last night on “Mad Money”, the former hedge fund manager recommended that investors pull out of SOUN as its valuation is entirely based on speculation and hype, instead of strong fundamentals.
Cramer is concerned about the long-term viability of SoundHound stock even though it has already tanked some 50% versus the start of 2025.
SOUN’s revenue growth suggests it’s not a meme stock
Jim Cramer is known for being vocal against investing in highly volatile and speculative names.
His view on SoundHound shares aligns with this cautious approach, urging investors to focus on companies with proven track records and strong fundamentals.
However, the voice AI firm’s latest reported financials question if it’s fair to breach over SOUN for those reasons.
In February, SoundHound AI came up with $34.54 million in revenue for its fiscal Q4 – more than double the $17.15 million it reported in the same quarter last year.
So, would you really call an AI company that’s growing 100% on a year-over-year basis a “meme stock”? I’m not too sure!
SoundHound continues to strike key partnerships
I disagree with Cramer on SoundHound stock also because it’s a name that continues to sign new deals and partnerships with prominent names across several industries.
Its technology is being used widely used in the automotive sectors by notable manufacturers, including Honda, Hyundai, and even Mercedes-Benz.
In the electronics space, giants like Samsung are using SOUN’s voice AI solutions in a bunch of its smart devices and IoT offerings.
SoundHound has, in particular, taken the restaurant industry by storm. Renowned names like Toast and Olo are using its technology to process voice orders more efficiently, freeing up staff for other tasks.
The Nasdaq-listed firm has also acquired SYNQ3 for about $25 million to bring its AI solutions to another 10,000 restaurant locations.
What these collaborations suggest is: SOUN’s technology is sitting well with customers across every industry.
If anything, it paints a rosy picture of what the future may hold for this company – something that I wouldn’t say is a feature of a “meme stock”.
Is SoundHound stock still overvalued?
All in all, it comes down to the valuation only.
While it may not be super appealing at writing, it’s important to note that if you were to make your investment decisions entirely on valuation, particularly in AI stocks, you would perhaps have missed every major tech rally in recent years.
And even on the valuation front, the fact that SoundHound shares are currently down about 50% year-to-date suggests it’s significantly less overvalued at writing than it was at the start of 2025.
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