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SoundHound AI Faces Wave of Insider Stock Sales

Matt MonacoAvatar
Written by Matt Monaco Reviewed by Jack Kellogg Fact-checked by Tim Sykes
Updated 10/12/2025, 12:20 pm ET 10/12/2025, 12:20 pm ET | 5 min 5 min read
SoundHound AI Faces Wave of Insider Stock Sales Thumbnail

SoundHound AI Inc. stocks have been trading down by -8.67 percent amid bearish market sentiment affecting tech stocks broadly.

Technology industry expert:

Analyst sentiment – negative

SoundHound AI (SOUN) faces significant financial challenges, indicated by its poor profitability metrics, such as an EBIT margin of -175.3% and a gross margin of 40.5%. Despite generating $84.7 million in revenue, the company operates at a substantial loss, evidenced by a net income of -$74.7 million for the reporting period. SoundHound’s balance sheet reflects a total equity of $359.8 million against liabilities of $219.7 million, granting a current ratio of 4.8, suggesting strong short-term liquidity. However, with negative free cash flow and poor return on equity (-80.23%), the company’s financial fundamentals signal a challenging trajectory going forward.

The weekly price pattern analysis of SoundHound AI reveals a volatile trading range. With a significant drop on October 10th, closing at $16.97, there is a downward trend. The sharp intraday fluctuations suggest considerable market uncertainty. For traders, the support level can be identified around $15.85, witnessed as the week’s low, while resistance is observed near $19.45. Given the high volatility, it is recommended to adopt a cautious short-selling strategy until stabilization signs appear. Observing trading volumes for spikes could also inform about potential trend continuations or reversals.

Recent insider sales by multiple executives, including the CEO and CTO, totaling millions of dollars, reflect potential internal concerns or profit-taking amidst elevated valuations. These transactions may weigh on investor sentiment, particularly as SoundHound’s performance lags behind technology sector benchmarks. The share sales might suggest a near-term increase in selling pressure, potentially driving the stock price lower. While the company’s innovative focus remains appealing within the software landscape, current financial strains and insider actions necessitate a cautious outlook. Monitoring price levels at $15.85 support and potential target near $20, providing a critical context for the future trading strategy.

Candlestick Chart

Weekly Update Oct 06 – Oct 10, 2025: On Sunday, October 12, 2025 SoundHound AI Inc. stock [NASDAQ: SOUN] is trending down by -8.67%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Quick Financial Overview

Examining SoundHound AI’s recent financial data reveals striking insights. Over the past few days, its stock has seen notable fluctuations, such as climbing to a high of $19.45 before closing lower at $16.97, showing market volatility. This instability might unsettle short-term investors, yet offers opportunities for trading.

Financially, SoundHound’s record indicates several challenges. The company’s operating environment is tough, given its negative profitability margins like an EBIT margin of -175.3%. These margins highlight significant operational inefficiencies. Meanwhile, the revenue data at $84.69M, with a revenue per share of $0.23, underscores growth potential but underlines the need for stronger profitability strategies to capitalize on revenue.

SoundHound holds a current ratio of 4.8, and a quick ratio of 4.3, suggesting asset management strength to meet short-term obligations. The balance sheet reflects sound financial health in terms of liquidity, but profitability metrics remain concerning. Additionally, the market’s valuation measures, such as a price-to-sales ratio of 53.84 and price-to-book of 19.67, suggest premium pricing by investors despite profitability constraints.

Insider transactions have a profound impact. Insiders selling significant shares suggests potential red flags about future growth sentiments. Although insider sales don’t conclusively signal trouble, investors often see them as concerning, especially when they happen in volume, such as the recent sell-offs at SoundHound AI.

In previous financial reports, SoundHound showed a challenging environment with operating losses thwarting expansion and shareholder returns. The cash flow statements reveal a net decrease in cash, reflecting operational cash flow difficulties. With a profound negative operating cash flow of $24.5M, financial maneuvers align with survival in adverse conditions rather than growth.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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Matt Monaco

Mentor and Trainer at StocksToTrade.com, Lead Mentor at Small Cap Rockets and To The Moon Report
He is a diligent trader and teacher in his To The Moon Report blogs and Small Cap Rockets strategy webinars. He shows up every day, and expects his students to as well. Matt is fond of trading sketchy, volatile OTC stocks with profit potential. His favorite patterns are panic dip buys and breakouts.
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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”