SoundHound (SOUN) shares are ripping higher on Friday after the company reported blockbuster Q2 earnings – reflecting accelerated adoption of its voice AI technology and improving operational efficiency. 

According to the artificial intelligence firm, its revenue came in up an exceptional 217% on a year-over-year basis, resulting in a much stronger-than-expected contraction in its per-share loss to $0.03 only. 

SoundHound stock has been rather lucrative for investors over the past four months, with shares currently up nearly 115% versus their low set in early April.  

Is It Too Late to Invest in SoundHound Stock?

SOUN’s management chose to raise its full-year guidance to as much as $178 million in revenue today, indicating there may still be time to build a position in this AI stock. 

Additionally, the voice artificial intelligence company said it remains fully committed to achieving adjusted EBITDA profitability by the end of 2025, effectively removing a lingering overhang from its stock. 

What’s also worth mentioning is that SoundHound retains a strong balance sheet with no debt and about $230 million in cash, underscoring its ability to scale operations and grow via acquisitions.   

Put together, all of this suggests the recent surge in SOUN shares may just be a drop in the bucket compared to where they’re headed in the long run. 

Does Valuation Remain an Overhang for SOUN Shares?

SoundHound shares are currently going for a price-sales (P/S) multiple of more than 50x, a bit too aggressive for conservative investors. 

However, there are other names within the artificial intelligence sphere that are trading at even more stretched valuations with no signs of deceleration in sight – think Palantir (PLTR) at roughly 150x sales. 

More importantly, the data analytics firm grew its revenue by 48% only in its latest reported quarter versus more than 200% that SOUN reported on Friday. 

Wall Street Sees SoundHound Ripping Higher

Investors should also note that Wall Street remains largely positive on SoundHound stock for the next 12 months. 

According to Barchart, the consensus rating on SOUN shares currently sits at “Moderate Buy” with price targets going as high as $18, or up another 30% from current levels.