We recently published a list of Jim Cramer’s Latest Mad Money Episode: Top 10 Stocks to Watch. In this article, we are going to take a look at where SoundHoud AI Inc (NASDAQ:SOUN) stands against other stocks on Jim Cramer’s top stocks to watch list.
Jim Cramer in a latest program on CNBC made the case for investing in individual stocks to enjoy bigger gains when compared to investing in just the broader market index funds. Cramer said that while it’s “easy” to just park your money in index funds and let the market do the work, investing in individual stocks can give you some “serious gains.”
“I think you should own more than just an index fund because buying individual stocks with special characteristics is how you can rack up some really serious gains. That includes often scoring speculative stocks. Far too often, we become snobs when we talk stocks. So many experts think that if you venture past the index, you could fall off some sort of intellectual cliff that makes any gains null and void. It’s as if the huge swath of points you could have gained simply don’t count. But that, people, is nonsense.”
Cramer said banks do not “care” where the money comes from and neither should investors. He urged investors to not always avoid speculation.
“I come tonight to praise speculation. Here, I’m the only one on TV who actually does this, believe it or not, and to show you how well you could have done if you picked some high flyers for your portfolio and simply held them for the long ride, along with your prosaic, precious index funds.”
READ ALSO: Jim Cramer’s Latest Lightning Round: 11 Stocks to Watch and Jim Cramer on AMD and Other Stocks.
For this article we watched the latest programs of Jim Cramer aired on CNBC and picked 10 stocks he’s talking about. With each company 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.
SoundHoud AI Inc (NASDAQ:SOUN)
Number of Hedge Fund Investors: 15
Jim Cramer was recently asked about SOUN. Here is what he said:
“I was quite surprised that this stock got as crushed as it did. The quarter wasn’t really that bad. I think if you buy this stock between 5 and 6, you get a nice trade.”
SoundHound 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 SOUN fell is the details around its acquisitions.
In its 10-Q filing, SoundHound AI revealed some surprising details, particularly regarding the impact of its recent acquisitions. The company 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 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 Jim Cramer’s top stocks to watch. 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.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.