Selecting the top-performing synthetic intelligence (AI) inventory a 12 months out is not simple. In 2023, it ended up being Nvidia. In 2024, all indicators are pointing towards Palantir Applied sciences. This shift from AI {hardware} to AI utility software program was predictable as a result of it must be deployed and change into helpful at a while for the entire funding {dollars} in {hardware} to repay.
Because of this, I feel we’ll see one other AI software program firm rise to the highest in 2025. My prediction is that it is going to be SoundHound AI (NASDAQ: SOUN), although it has already had an extremely robust 2024, rising over 300%. So, how can an organization that has already risen a lot be a high choose for 2025?
Are You Lacking The Morning Scoop? Get up with Breakfast information in your inbox each market day. Signal Up For Free »
SoundHound AI’s platform is centered round taking a voice enter and turning it right into a immediate for an AI platform. This has a number of makes use of, together with automaking, eating places, monetary companies, insurance coverage, and healthcare. The corporate already has merchandise serving these industries, and automakers and eating places are a few of its largest purchasers.
Nonetheless, the corporate has change into fairly diversified in 2024. Throughout final 12 months’s third quarter, 72% of income got here from one shopper, and 90% of complete income got here from the automotive sector. Now, the biggest shopper contributed solely 12% of income, and the biggest sector made up 25% of income.
That diversification is a key a part of SoundHound turning into extra related in all industries and turning right into a extra steady firm. If that single shopper left in late 2023, it might need brought about the enterprise to go stomach up. If its largest shopper leaves now, it should nonetheless harm, however not as a lot as it will have earlier than.
Whereas SoundHound nonetheless has dangers related to it, this performs an enormous half in reducing that threat degree.
Within the third quarter, income grew 89% 12 months over 12 months to $25.1 million. This makes it a small-cap inventory, as its income prior to now 12 months totals $67 million. For different, extra established software program corporations, that may be a reasonably small share of general income, however the firm is not anticipated to remain there for lengthy.
Administration tasks 2025 income will are available between $155 million and $175 million, which is almost double the income it tasks for 2024. Clearly, SoundHound expects its enterprise to take care of its increase for 2025.
This additionally highlights a key funding level: How excessive is the restrict if its merchandise change into the trade normal in audio recognition? Consider all of the methods we use voice to regulate what we do; now, think about that being related to the ability of AI. SoundHound might change into an enormous winner on this area, even after it has run up a lot.
