Jim Cramer Says SoundHound AI (SOUN) AI is a ‘Meme’ Stock

We recently published a list of Jim Cramer’s February Portfolio: Top 10 Stocks. In this article, we are going to take a look at where SoundHound AI, Inc. (NASDAQ:SOUN) stands against other stocks in Jim Cramer’s February portfolio.

Jim Cramer in a latest program on CNBC talked about the importance of investing in companies with good management teams. Cramer said that sometimes struggling companies could be turned around because of smart leadership.

“I have to tell you, I do want more out of my stocks and just better than feared. I am tired of tech just sitting there and people arguing about it all the time. It’s getting boring to me. And that’s why I want to go far afield tonight and suggest that we look for the companies with the best new coaches, because we know a great new coach with a fresh look can easily turn around a company.”

Cramer then talked about several companies where strong leadership teams and intelligent CEOs turned around struggling businesses.

“Not all publicly traded companies are hostages to forces beyond their control, like a Chinese outfit we never heard of that has just made it so all we talk about is. Sometimes when you bring in a great new CEO, they can turn around the whole business, giving the investor spectacular gains, even when tech blinds us like mustard gas.”

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In

For this article we picked 10 stocks Jim Cramer talked about in his recent programs. 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).

Jim Cramer Says SoundHound AI (SOUN) AI is a ‘Meme’ Stock

SoundHound AI, Inc. (NASDAQ:SOUN)

Number of Hedge Fund Investors: 11

Jim Cramer was recently asked about SoundHound AI, Inc. (NASDAQ:SOUN). He said it’s a “meme” stock and he cannot recommend it.

“Okay, this is a meme stock, and they are kind of getting it going. I’m never going to get in the way of a meme stock because you never know how high they can go.”

SoundHound AI, Inc. (NASDAQ:SOUN) operates in a growing $150 billion voice AI market and is shifting toward recurring revenue. Its top customer which accounted for about 72% of revenue in 2023 now accounts for just 12%. However, competition and valuation are risks for the stock. Amazon’s Alexa, Google’s Assistant, and Apple’s Siri limit SoundHound AI, Inc. (NASDAQ:SOUN)’s potential growth. However, SoundHound AI, Inc. (NASDAQ:SOUN)’s Deep Meaning Understanding technology stands out with its advanced natural language processing and real-time capabilities, unlike competitors that use sequential processing. Nonetheless, the stock’s valuation is concerning and value-conscious investors can look elsewhere for better options.

Overall, SOUN ranks 10th on our list of stocks in Jim Cramer’s February portfolio. 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.