10 Small Cap Stocks with High Potential

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

Number of Hedge Fund Holders: 15

Market Cap as of October 5: 1.68 Billion

Average Analysts’ Target Price as of October 5: $7.79

Year to date Share Price Gain: 121.23%

SoundHound AI, Inc. (NASDAQ:SOUN) is a prominent small-cap company specializing in independent voice artificial intelligence (AI) solutions. It serves various industries, including automotive, TV, and Internet of Things (IoT), by providing businesses with advanced conversational interfaces. This diversified portfolio positions the company as a high-potential stock for inclusion in our lis tof ten small cap stocks with high potential, given its growth prospects and solid fundamentals.

The company’s unique Houndify platform offers a suite of tools enabling brands to develop conversational voice assistants. This platform supports custom commands, text and voice queries, and an extensive library of content domains. Additionally, SoundHound’s product lineup includes Smart Answering for customer service and SoundHound AI, Inc. (NASDAQ:SOUN) Chat AI, which integrates real-time data such as weather, stocks, and sports, making it a comprehensive AI assistant.

SoundHound AI, Inc. (NASDAQ:SOUN) Q2 2024 earnings call highlighted strong performance, with revenue up by 54% year-over-year. The company’s bookings backlog doubled to $723 million, demonstrating the increasing demand for its solutions. The annual run rate of queries surpassed 5 billion, showcasing its growing market penetration and consumer engagement. Moreover, the company’s recent acquisition of Amelia, a conversational AI leader, further strengthens its presence in the generative AI space and expands its market opportunities.

SoundHound AI, Inc. (NASDAQ:SOUN) strategic partnerships with major automotive manufacturers like Stellantis are particularly noteworthy. The integration of SoundHound Chat AI into vehicles across multiple brands such as Peugeot, Opel, and Alfa Romeo has led to increased adoption rates and boosted revenue potential through upsell features. This collaboration also marks SoundHound as the first company to roll out ChatGPT-style capabilities in vehicles across Latin America.

The company is also gaining traction in the quick-service restaurant (QSR) segment, winning contracts with five of the top 15 QSRs based on location count. SoundHound’s voice solutions enhance operational efficiency and customer experience, making it an attractive proposition for large enterprises. Overall, SoundHound AI, Inc. (NASDAQ:SOUN) consistent revenue growth, expanding market presence, and innovative AI solutions position it as a small-cap stock with significant upside potential for investors seeking exposure to the rapidly growing AI industry.