SoundHound AI Shares See Decline Amid Insider Sales and Valuation Concerns

NEW YORK, January 2, 2026 — Shares of SoundHound AI, Inc. fell 0.7% to $9.97 in premarket trading on Wednesday, reflecting a significant decline of approximately 11% from its close on December 22. This downturn follows a series of insider sales announced on the company’s investor relations site, highlighting potential concerns among investors.

SoundHound AI, known for its innovative voice recognition software used in various applications like customer service and automotive systems, first went public through a reverse merger with a SPAC in August 2022. The stock has experienced high volatility, recently trading down nearly 50% in 2025.

Chief Executive Keyvan Mohajer reported selling 144,326 shares, while other executives also disclosed substantial sales tied to tax obligations from vested stock units. These sales came alongside indications that the stock may be overvalued based on its price-to-sales ratio, with a valuation of $4.7 billion projected against anticipated revenues of $173 million this year.

Despite its rapid revenue growth, investors are wary of SoundHound AI’s future. “Enterprise AI adoption is booming globally,” Mohajer stated in a recent update, but with questions lingering regarding competitive pressures and the sustainability of its innovations, market sentiment remains cautious.

In light of these insider transactions, analysts emphasize that while the company shows promise, its current stock price poses risks for potential investors. As of mid-December, approximately 30.6% of publicly traded shares were sold short, a factor contributing to the stock’s volatility.

Going forward, investors are looking for clarity on SoundHound AI’s ongoing operations and any potential revenue growth to stabilize the stock around the $10 mark amid growing competition in the AI marketplace.