Investors are focused on AI infrastructure, but smaller companies like SoundHound AI (NASDAQ: SOUN) are making waves. SoundHound’s AI technology excels in areas like drive-thru order processing and could revolutionize multiple industries. The company saw a 68% revenue increase in Q3 and raised its 2025 outlook. However, the stock’s high valuation and operating margin are concerns for investors.

SoundHound AI may have impressive growth potential, but its stock isn’t cheap despite a recent sell-off. The company’s high valuation led to a 50% drop from its peak, and while its growth justifies the price tag, profitability remains a challenge. With a high operating margin, SoundHound AI must address this issue to become a top AI stock in 2026.

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Read more at Nasdaq: SoundHound AI Looks Unstoppable. Is It a Top AI Stock to Buy for 2026?