SoundHound AI’s second quarter earnings crushed analysts’ expectations. The company raised its revenue guidance for the full year. But it’s unprofitable, its gross margins are slipping, and its valuations look frothy.

The primary concern for investors is whether the stock remains a solid investment following such a considerable increase.

SoundHound AI ( SOUN) has turned into a mid-cap AI darling over the past year. Even though it has come off a euphoric high this winter, the current uptrend looks more sustainable, especially as Q2 earnings have shown that this company is starting to do well financially.