SoundHound AI (NASDAQ: SOUN) has been one of many large winners within the AI growth up to now.
Shares of the voice-activated AI specialist jumped by greater than 800% final yr, although it has cooled off a bit since. Buyers have guess on the fast-growing firm, which bought its begin as a music identification app like Shazam and now offers know-how for automakers, eating places, and different companies to run voice-activated methods.
SoundHound has been rising quick as nicely, with income up 89% within the third quarter to $25.1 million, although acquisitions have helped drive that development.
The inventory trades at a sky-high valuation with a price-to-sales ratio of 63. That and a scarcity of profitability may set it up for a pullback this yr since most of final yr’s positive factors appear to be as a result of hype on its affiliation with AI.
The next two shares appear like good bets to be extra beneficial than SoundHound AI one yr from now.
GXO Logistics (NYSE: GXO) is the world’s greatest pure-play contract logistics firm. It operates almost 1,000 high-tech warehouses, serving corporations like Apple and Nike to verify merchandise get to the place they’re going shortly and effectively, and course of returns as wanted.
Since being spun off from XPO in 2021, GXO Logistics has delivered typically sturdy outcomes, however the inventory pulled again sharply just lately after administration stated {that a} potential acquisition of the corporate was now not taking place.
The inventory is now down by roughly a 3rd from the place it was buying and selling earlier than that information broke in December, and its market cap is now barely beneath SoundHound’s at $5.1 billion as of Feb. 11.
Nonetheless, GXO does not want a buyout with the intention to achieve success. In truth, the corporate was spun off with the mandate that it might develop by way of acquisitions, consolidating its management within the business. It purchased Clipper Logistics and Wincanton in the UK and PFSweb within the U.S.
Along with the frustration with the dearth of a buyout, the inventory could also be languishing as a result of weak spot within the broader industrial financial system and concern about tariffs. Nonetheless, the corporate remains to be on monitor for hitting its 2027 targets, which name for $8 billion to $12 billion in income and $1.6 billion in adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA). The inventory is buying and selling at simply thrice that determine at this time.
If GXO can maintain making progress towards that aim, the inventory appears to be like like guess to double and even triple by 2027, passing SoundHound alongside the way in which.
One other fast-growing firm with the potential to overhaul SoundHound in market cap this yr is Sweetgreen (NYSE: SG).