One artificial intelligence (AI) stock that has received a lot of buzz is SoundHound AI (NASDAQ: SOUN). While the reasons for the hype are numerous, they don’t overshadow the fact that SoundHound AI is growing rapidly with a bullish outlook in 2025.
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As a result, the stock could continue to record serious gains, and investors may want to keep this stock on their radar heading into 2025.
SoundHound AI does pretty much what its name suggests: It incorporates AI with audio recognition. Integrating AI models with voice prompts has long been done; just take a look at the various car, home, or phone assistants. However, the recognition of voice inputs has always been OK at best, and the response quality also varied.
The company’s platform delivers strong advancements in this technology, and it has already seen widespread adoption in some fields. One area it has seen success in is restaurant order automation. Whether it’s over the phone or in a drive-thru, SoundHound has a product that can outperform humans in terms of speed and accuracy.
Another area SoundHound has seen growth is the automobile market. Specifically, through its partnership with Stellantis, SoundHound has rolled out generative AI-powered chatbots that are far more capable than the run-of-the-mill vehicle assistants most vehicles were previously equipped with. This technology hasn’t made it to the U.S. yet, but it has been integrated into newer Stellantis vehicles in Europe and Japan.
There are countless more uses for SoundHound’s technology, and the opportunities form the foundation of an attractive investment.
In the third quarter, SoundHound’s revenue rose an impressive 89% year over year to $25.1 million. A year ago, 90% of revenue came from the automotive industry, but in the latest quarter, the largest sector was only 25% as restaurants, financial services, insurance, and healthcare have all increased their share.
SoundHound isn’t profitable as it’s still in the early stages of growth. Still, investors should know its operating loss was $33.8 million for the quarter, meaning expenses more than doubled what the company generated in revenue. That said, unless SoundHound’s growth falls off substantially, this loss is not yet a major concern.
Fortunately, management is guiding for full-year 2024 revenue of $82 million to $85 million, up more than 75% from the previous year. And in 2025, management expects revenue to land between $155 million and $175 million, thanks in part to its acquisition of Amelia, an enterprise voice AI company.
