SoundHound AI (NASDAQ: SOUN) opened in the red on Thursday after CFO Nitesh Sharan said he’s stepping down to join a quantum computing company on April 3rd.
However, a senior D.A. Davidson analyst, Gil Luria, says the announcement is hardly any reason for long-term investors to trim their exposure to the voice artificial intelligence (AI) specialist.
While SoundHound stock has crashed over 40% since early January, Luria believes it’s “strongly” positioned to double from here over the next 12 months.
Why SoundHound stock slipped on Thursday?
SOUN shares sold off on Sharan’s announcement due to uncertainty that naturally follows the exit of a top executive.
Nitesh Sharan served as SoundHound’s chief of finance for four years, during which it transitioned from a private entity into a “high-growth” public company.
Investors see him as a key financial architect behind SOUN’s eight-fold increase in revenue since 2021. They’re treating his departure as a potential “canary in the coal mine,” fearing hidden issues or a shift in financial trajectory.
Moreover, the absence of a permanent replacement, with cofounder James Hom taking over as an interim CFO, leaves a leadership void during a critical scaling phase.
This “management risk” is especially significant for speculative growth stocks like SoundHound, where narrative and leadership trust are paramount to valuation.
Why D.A. Davidson remains bullish on SOUN shares
Despite the optics of Sharan’s exit, D. A. Davidson reiterated its “buy” rating and a bold $14 price target on SoundHound shares today, signaling they could more than double from here by year-end.
In his research note, analyst Gil Luria emphasized that Sharan is leaving on high notes, having “set up SOUN for continued success” with a robust balance sheet that boasts more cash than debt.
Citing an attractive current ratio of 4.59, Luria dubbed Sharan’s departure a personal career move toward the burgeoning quantum computing industry – rather than a reflection of internal distress.
By valuing SoundHound at about 20 times projected revenue for 2027, the analyst confirmed that company’s fundamental voice AI engine remains intact and undervalued by the broader market’s knee-jerk reaction.
Should you buy the dip in SoundHound AI?
The long-term bull case for SOUN stock is underpinned by its fast-growing ecosystem and a record $169 million in annual revenue last year.
The firm is uniquely positioned for the “Agentic AI” era with its multimodal, multilingual platform that runs entirely on the “edge” – a key advantage for automotive and privacy-conscious enterprise clients.
Recent partnerships with giants like Nvidia and retail leaders including Five Guys demonstrate it’s moving beyond simple voice commands into complex, revenue-generating AI agents.
With a projected revenue floor of $225 million for 2026 and a massive backlog of enterprise deals, the current dip may, therefore, represent a “generational entry point” for investors betting on future of conversational intelligence.
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