We recently published a list of 9 Buzzing AI Stocks to Watch on Latest News. In this article, we are going to take a look at where SoundHound AI Inc (NASDAQ:SOUN) stands against other buzzing AI stocks to watch on latest news.
Doug Clinton, Intelligent Alpha founder, talked recently about the issue of scaling in AI on CNBC and said that in the past the improvement of AI models was surging based on the data inputs. However, Clinton referred to the recent reports of AI models hitting a plateau in performance. He believes this issue will be important for AI investors in the coming months and years.
“Just to give the quick 101: Over the last few years, what we’ve seen in AI model development is that the more data you put into these models and the more compute you use to train them, the better the models get—very predictable. However, recent reports from OpenAI and Google show that the latest models they’ve trained haven’t been as good as expected based on scaling laws. This has sparked debate in Silicon Valley. Even Sam Altman tweeted about it last week, saying, “There is no wall,” so maybe it’s not an issue—we’ll see. But I think Jensen really needs to address that question because the 18 to 24-month picture hinges on whether these companies will need to invest in something beyond just compute.”
However, the analyst is bullish on the broader AI market in the long term and believes companies are just getting started in this bull market.
“I think if you take a longer-term view—2 to 4 years—we’re still very confident we’ll be in an AI bull market. That doesn’t mean there won’t be pullbacks here and there, but I think we have a long way to go. Companies are really just starting to adopt AI, and we’ll begin to see those revenues over the next year and beyond.”
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For this article we picked 10 AI stocks trending on latest news and analyst ratings. With each stock we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A software engineer focused on a computer screen, writing code to create a conversational assistant.
SoundHound AI Inc (NASDAQ:SOUN)
Number of Hedge Fund Investors: 15
In May this year, Jim Cramer was asked about SoundHound AI Inc (NASDAQ:SOUN) on during a program on CNBC. Here is what he said:
“It’s losing money, it’s been around forever, and it’s not making money. That’s no good for me.”
SoundHound AI Inc (NASDAQ:SOUN) shares fell recently despite the company reporting impressive third-quarter 2024 financial results and raising its full-year revenue forecast.
“SOUN raised its FY24 revenue forecast and provided more details on its FY25 projections, as the company expands its target market and is well-positioned to benefit from the increasing demand for its voice-enabled ecosystem, which is expected to drive both growth and profit margins,” stated Wedbush analysts, led by Daniel Ives, in a note to investors.
One of the reasons why SoundHound AI Inc (NASDAQ:SOUN) fell is the details around its acquisitions.
In its 10-Q filing, SoundHound AI Inc (NASDAQ:SOUN) revealed some surprising details, particularly regarding the impact of its recent acquisitions. SoundHound AI Inc (NASDAQ:SOUN) had announced a deal with Amelia during the quarter and completed its acquisition of SYNQ3 at the beginning of the year, meaning the reported metrics do not fully reflect organic or pro forma growth.
Initially, the Q3 guidance indicated that Amelia would only provide a modest boost to revenues. SoundHound AI Inc (NASDAQ:SOUN) had claimed significant progress with voice AI ordering deals in the restaurant sector and boasted a large backlog of over $723 million from automotive voice AI contracts.
However, when factoring in the contributions from Amelia and SYNQ3, the actual pro forma numbers are more concerning. Revenues for Q3 dropped 15%, falling to $33.7 million from $39.7 million in the same quarter last year.
Overall, SOUN ranks 9th on our list of buzzing AI stocks to watch on latest news. While we acknowledge the potential of SOUN, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SOUN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.