10 Hot Software Stocks with High Upside Potential

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1) SoundHound AI, Inc. (NASDAQ:SOUN)

% Gain Over Past 6 Months: ~121.5%

Average Upside Potential: ~118.8%

Number of Hedge Fund Holders: 11

SoundHound AI, Inc. (NASDAQ:SOUN) develops independent voice AI solutions, enabling businesses across automotive, TV, IoT, and customer service industries to deliver high-quality conversational experiences. The company opines that its in-vehicle voice commerce platform can resonate well with automakers. SoundHound AI, Inc. (NASDAQ:SOUN) introduced a new platform at the CES 2025 tech trade show. The company exhibited its on-the-go food ordering service to the customers.

SoundHound AI, Inc. (NASDAQ:SOUN)’s technology is being widely adopted by the broader automotive sector, with big brands including Hyundai integrating its vocal features into the vehicles. There has been rapid adoption by restaurants, powering ordering systems in more than 10,000 locations. SoundHound AI, Inc. (NASDAQ:SOUN)’s increased scale, together with strong market enthusiasm for conversational AI, is expected to aid its long-term growth prospects.

SoundHound AI, Inc. (NASDAQ:SOUN) has significantly increased industry diversification with well-balanced contributions throughout automotive, restaurants, financial services, healthcare, and insurance sectors, each accounting for 5%-25% of revenue in Q3 2024 as compared to more than 90% of automotive only in the prior year. SoundHound AI, Inc. (NASDAQ:SOUN) projects its FY 2024 revenue of between $82 million – $85 million and its FY 2025 revenue to be $155 million – $175 million.

While we acknowledge the potential of SOUN as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued 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.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

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