Picking the top-performing artificial intelligence (AI) stock a yr out is not easy. In 2023, it ended up being Nvidia. In 2024, all signs are pointing toward Palantir Technologies. This shift from AI hardware to AI application software was predictable since it needs to be deployed and turn into useful at a while for the entire investment dollars in hardware to repay.
In consequence, I believe we’ll see one other AI software company rise to the highest in 2025. My prediction is that it is going to be SoundHound AI (NASDAQ: SOUN), despite the fact that it has already had an incredibly strong 2024, rising over 300%. So, how can an organization that has already risen a lot be a top pick for 2025?
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SoundHound AI’s platform is centered around taking a voice input and turning it right into a prompt for an AI platform. This has multiple uses, including automaking, restaurants, financial services, insurance, and healthcare. The corporate already has products serving those industries, and automakers and restaurants are a few of its largest clients.
Still, the corporate has turn into quite diversified in 2024. During last yr’s third quarter, 72% of revenue got here from one client, and 90% of total revenue got here from the automotive sector. Now, the most important client contributed only 12% of revenue, and the most important sector made up 25% of revenue.
That diversification is a key a part of SoundHound becoming more relevant in all industries and turning right into a more stable company. If that single client left in late 2023, it may need caused the business to go belly up. If its largest client leaves now, it is going to still hurt, but not as much as it will have before.
While SoundHound still has risks related to it, this plays an enormous part in lowering that risk level.
Within the third quarter, revenue grew 89% yr over yr to $25.1 million. This makes it a small-cap stock, as its revenue up to now 12 months totals $67 million. For other, more established software corporations, that might be a reasonably small percentage of overall revenue, but the corporate is not expected to remain there for long.
Management projects 2025 revenue will are available between $155 million and $175 million, which is sort of double the revenue it projects for 2024. Clearly, SoundHound expects its business to take care of its boom for 2025.
This also highlights a key investment point: How high is the limit if its products turn into the industry standard in audio recognition? Consider all of the ways we use voice to manage what we do; now, imagine that being related to the ability of AI. SoundHound could turn into an enormous winner on this space, even after it has run up a lot.