10 Worst Artificial Intelligence Stocks to Buy Under $10

4) SoundHound Al, Inc. (NASDAQ:SOUN)

Number of Hedge Fund Holders: 15

Share Price As On September 19: $5.01

SoundHound Al, Inc. (NASDAQ:SOUN) is an innovator of conversational intelligence, offering an independent Voice Al platform that allows businesses throughout industries to deliver high-quality conversational experiences to customers.

SoundHound Al, Inc. (NASDAQ:SOUN) is not a profitable business. In 2023, it saw a net loss of $88.9 million, and in 2Q 2024, its GAAP net loss came in at $37.3 million and its non-GAAP net loss was $14.8 million. SoundHound Al, Inc. (NASDAQ:SOUN) closed 2023 with $84.3 million of debt, and it is not a cash-flow-positive company. Since the company is still at a cash-burning stage, there is a high chance that it will need to spend money on its growth initiatives. This creates a risk for the investors because if the company decides to issue shares, it will lead to a dilution of existing shareholders, and secondary offerings might result in a sharp sell-off.

However, Wall Street analysts are quite optimistic about the company’s growth prospects. This optimism stems from the improvement in gross margins and scaling of revenue. The market experts have expressed confidence in the company’s strategy for revenue growth and cost management. Therefore, they anticipate a move towards operating profitability over time. SoundHound Al, Inc. (NASDAQ:SOUN) saw a strong increase in its cumulative subscriptions and bookings backlog, touching $723.0 million as of June 2024. This is about twice the amount as compared to the previous year.

SoundHound Al, Inc. (NASDAQ:SOUN)’s recent mergers and acquisitions, like SYNQ3 and Amelia Al, placed it in a strong position when it comes to the conversational Al space, enhancing its competitive edge.

Moreover, it has secured contracts with leading EV manufacturers and it focuses on expanding its technology deployment in ~20 markets.

Analysts at Cantor Fitzgerald raised the shares of SoundHound Al, Inc. (NASDAQ:SOUN) from a “Neutral” rating to an “Overweight” rating. They have increased its price objective from $5.00 to $7.00 on 9th August. As per Insider Monkey’s 2Q 2024 database, 15 hedge funds held stakes in the company.