We recently published an article titled Why These 15 AI Stocks Are Skyrocketing So Far In 2025. In this article, we are going to take a look at where Cerence Inc. (NASDAQ:CRNC) stands against the other AI stocks.
AI stocks were hit hard by DeepSeek’s announcement, but it seems to be that DeepSeek is only causing more optimism in the long run for many AI companies. This is because cost has been a big problem for AI companies, and if they can make progress on this front, it will let AI companies make much more powerful models with the existing hardware they have.
DeepSeek is open source, so most AI companies can learn from its efficiency and integrate it. Moreover, companies and VCs are still willing to put money into AI companies and are doubling down on their bets. This likely means that AI companies will be able to make even more progress in the long run.
The real action has been spreading into many AI companies beyond the familiar names. Plus, we’re seeing the rise of agentic AI. These stocks crushed the market last year, and despite the DeepSeek catalyst this year, they are still doing well.
Methodology
For this article, I screened the top-performing AI stocks year-to-date. Stocks that I have covered recently will be excluded from this list.
I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds invest in? 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 man with an AI powered virtual assistant, demonstrating the coexistence of the two.
Cerence Inc. (NASDAQ:CRNC)
Number of Hedge Fund Holders In Q3 2024: 10
Cerence Inc. (NASDAQ:CRNC) is a tech company that specializes in AI-powered virtual assistants. It is mainly geared towards the automotive and transportation markets, for things like speech recognition.
The stock has been surging so far in 2025 due to its announcement of a collaboration with Nvidia to make its large language models better for automotive applications. Cerence will use Nvidia’s AI Enterprise platform to improve the performance of its CaLLM solutions.
Moreover, it has pivoted significantly to generative AI technologies and launched six of these AI solutions. That helped it secure 10 customer wins in FY2024. Cerence also implemented a plan aimed at saving $35 million to $40 million annually.
FY 2024 revenue is at $331.5 million for the full year, up from $294.5 million in 2023. However, Q4 revenue declined year-over-year to $54.8 million from $80.8 million. It also posted a significant GAAP net loss of $588 million for FY24 due to goodwill impairment charges.
Adjusted EBITDA was -$1.9 million for Q4.
It expects $236 million to $247 million in FY25 revenue.
The consensus price target of $11.6 implies 14.3% downside risk.
CRNC stock is up 70.74% year-to-date.
Overall CRNC ranks 3rd on our list of the AI stocks that are skyrocketing so far in 2025. While we acknowledge the potential of CRNC as an investment, our conviction lies in the belief that some 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 CRNC 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.
