We recently published a list of 15 AI Stocks That Skyrocketed in Q4. In this article, we are going to take a look at where SoundHound AI, Inc. (NASDAQ:SOUN) stands against other stocks that skyrocketed in Q4.
AI has been dominating the news, market, and basically almost everything we come across for the last two years, since the launch of ChatGPT. In 2024, AI made significant strides, especially in agentic systems and smaller, more efficient models. In addition to that, advancements in retrieval-augmented generation (a method that combines information retrieval with text generation) improved data accuracy and reduced AI errors, while smaller models became faster and more energy-efficient, making AI more accessible.
However, the year also saw a rise in AI-driven cybercrime, with deepfakes used in scams and election interference. As these risks grew, governments and regulators began to implement measures to control AI’s development and use. However, opinions on the balance between innovation and safety remain divided.
The Next Chapter for AI in 2025
While AI continues to evolve and shows immense long-term potential, it still faces challenges such as data limitations, model reliability, and the need for revenue-generating applications. With the maturity of this technology, it will be crucial to address these obstacles in order to meet investor expectations and unlock its full potential in the coming years.
Julie Biel, chief market strategist and portfolio manager at Kayne Anderson Rudnick, discussed the current state of AI investments in a CNBC interview and noted that while significant capital has been poured into developing the technology, much of it is still at the infrastructure stage. She pointed out that AI’s efficiency improvements are beneficial, but the lack of revenue-generating use cases is preventing broader enthusiasm. Biel also raised concerns about a potential AI bubble, as she mentioned issues such as hallucinations and data limitations that could become a hurdle in short-term progress. Despite the strong long-term outlook, she suggested that investors’ patience may wear thin if immediate returns do not materialize.
In another CNBC interview, Anastasia Amoroso, iCapital chief investment officer, highlighted the continued growth of AI as a major theme in 2024, especially its expansion into AI software and power. She noted that while the last two years focused on semiconductors, this year should focus on AI software monetization and the energy demands of AI infrastructure, like data centers. Amoroso believes that AI will remain a key investment opportunity into 2025 and that the sector’s broadening scope, including AI software and its supporting power needs, presents solid prospects for growth.
Our Methodology
For this article, we listed 15 best-performing stocks from Insider Monkey’s database of AI stocks with at least over 100% share price returns in the fourth quarter of 2024. The stocks are listed in ascending order of their share price performance. We also added the hedge fund sentiment around each stock which was taken from Insider Monkey’s Q3 database of 900 elite hedge funds.
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.
SoundHound AI, Inc. (NASDAQ:SOUN)
Number of Hedge Fund Holders: 11
Stock Price Performance in Q4 2024: ~326%
SoundHound AI, Inc. (NASDAQ:SOUN) provides voice AI solutions that help businesses create conversational experiences. Its offerings include platforms for building voice assistants, tools for real-time data integration, and AI-powered customer service solutions. The company also provides technologies like speech recognition, natural language understanding, and text-to-speech to enhance functionality.
The start of 2025 has not been so good for SoundHound (NASDAQ:SOUN) but it had quite the run in the fourth quarter of 2024. It achieved some notable milestones in the quarter including its Amelia conversational AI platform winning the XCelent Advanced Technology 2024 Award from Celent for its exceptional functionality and generative AI capabilities in retail banking. Moreover, the company’s AI was integrated into Lancia Ypsilon vehicles’ S.A.L.A. infotainment system, enhancing driver experience with conversational AI features across several European countries.
In November, SoundHound’s (NASDAQ:SOUN) voice technology was integrated into Kia vehicles in India, offering Hindi language support and advanced conversational capabilities for a personalized in-car experience. The company also announced in the same month that its Amelia AI agents have helped Apivia Courtage handle over 100,000 customer calls, reducing direct inquiries by 20% and enhancing employee productivity.
In December 2024, SoundHound AI launched its Smart Ordering system at all 130 Torchy’s Tacos locations, enabling customers to place accurate, natural voice orders. Additionally, SoundHound’s Dynamic Drive-Thru solution was deployed at Church’s Texas Chicken, enhancing order accuracy and reducing wait times through AI-powered, real-time feedback. Meanwhile, SoundHound’s Amelia Conversational AI Platform was recognized as a leader in Frost & Sullivan’s 2024 Radar for Enterprise Conversational AI in Healthcare, showing its innovative solutions that improve patient engagement and streamline healthcare operations.
However, it is important to note that despite posting record third-quarter 2024 results, including an 89% revenue increase to $25.1 million, on November 12, the company stock dropped around 17% by the next day. Analysts had mixed views about the stock. For example, Wedbush remained positive on the stock, while Ladenburg Thalmann downgraded the stock to Neutral due to concerns about the Amelia AI acquisition’s impact on margins and higher expected losses.
Overall, SOUN ranks 2nd on our list of stocks that skyrocketed in Q4. While we acknowledge the potential of SOUN as an investment, our conviction lies in the belief that 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.