SoundHound AI Inc (NASDAQ:SOUN) shares are trading lower Tuesday after the company filed for a mixed shelf offering of up to $500 million.

SoundHound's stock has struggled since its presentation at CES 2025, down nearly 30% since the event kicked off in early January. Today was especially rough, however, as the market digested news of the disruptive Chinese artificial intelligence (AI) entry, DeepSeek.

SoundHound's fundamentals are strong, with significant revenue growth and narrowed net losses, but the valuation is excessively high. See why SOUN is sell rated.

Down 29.4% in the first two-and-a-half weeks of the New Year, SoundHound AI (Nasdaq: SOUN) stock is off to a rocky start in 2025. One thing you cannot say about SoundHound stock though, is that it’s been boring ride.

The beginning of 2025, however, has been a much different story. As of Jan. 20, the stock has fallen more than 31% out of the gate. Whether investors are cashing out their profits from last year or are simply having second thoughts about the stock and its valuation is the big question right now.