Mitrade Insights is dedicated to providing investors with rich, timely and most valuable financial information to help investors grasp the market situation and find timely trading opportunities.

2021

Best News & Analysis Provider

FxDailyInfo

2022

Best Forex Educational Resources Global

International Business Magazine

Insights

News

1 Hypergrowth Tech Stock to Buy in 2025

Source The Motley Fool

It never hurts to plan ahead.

One of the greatest hypergrowth stocks on the market is a terrible buy right now, but that should change in 2025. An overheated stock price should cool down in the next few months, while the underlying long-term success story remains.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

As a result, I wouldn't touch shares of SoundHound AI (NASDAQ: SOUN) right now. At the same time, I'm prepared to pounce if and when the soaring stock price comes back to earth.

Here's why I'm excited about SoundHound AI's future, and what I need to see before buying the stock again.

The future sounds bright for SoundHound AI

SoundHound AI has a great future.

Voice commands are making their way into many industries. Drive-through ordering windows and phone-based menus are already popular examples, along with in-car infotainment systems and various consumer electronics devices. The usual tech giants all have some kind of voice interpretation technology going on, including Apple's Siri and Amazon's Alexa assistants.

Despite the presence of deep-pocketed household names, tiny SoundHound AI is winning voice-control contracts all over the place. The company already has long-term contracts with several automakers and fast-food chains. The roster is growing, and so is SoundHound AI's product portfolio. Just this month, for example, the company combined its two flagship technologies to enable food orders through your car stereo.

So this little company is going places and I can't wait to see the stock build value in the long run.

The stock is way too expensive

But I'm not a SoundHound AI buyer right now. Instead, I sold about half of my position in December, locking in the gains from a speculative price surge.

SoundHound AI quickly built a following in well-known meme stock channels online, setting the stock up for a skyrocketing price surge. The stated idea was to take advantage of a high short-seller interest, forcing bearish investors to cover their bets in a so-called short squeeze. The move appears to have peaked over the holidays, and the stock now trades roughly 47% below the top of that price spike.

I look forward to rebuilding my decimated SoundHound AI position, but it's still too early. The stock looked overpriced in the spring of 2024, when a small investment by Nvidia inspired rumors about a potential buyout or maybe an exclusive partnership. The rumors have not materialized and SoundHound AI's chart never even reached $9 in that bullish cycle.

Again, I have high hopes for SoundHound AI's business prospects in the long run. Still, many things can go wrong along the way and the stock has not yet earned the lofty valuations it saw in recent weeks. The price to sales ratio topped out at 110.5 on December 26. It has backed down to 73 times sales in January 13, but that's still too much.

SoundHound AI deserves a closer look if the stock price backs down to single-digit territory. I'm also monitoring how the company's business is developing. November's third-quarter report showed robust revenue growth and lower net losses, and management provided ambitious revenue guidance for the next two years.

Three arrows hitting the center of a dollar-sign archery target.

Image source: Getty Images.

Ready to pounce: Here's what I'm looking for

So SoundHound AI's business performance is on track. The meme stock mania should fade out over the next couple of months. The bulk of the speculative action probably fell in December, as indicated by lower prices and thinner trading volume.

I'm ready to buy back the SoundHound AI shares I sold, but only if the price drop continues from about $13 per share to the $6-$7 range. Your mileage may vary, of course. It's hard to pin a proper valuation on small but fast-growing technology stocks like this one.

Should you invest $1,000 in SoundHound AI right now?

Before you buy stock in SoundHound AI, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoundHound AI wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $807,495!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of January 13, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Anders Bylund has positions in Amazon, Nvidia, and SoundHound AI. The Motley Fool has positions in and recommends Amazon, Apple, and Nvidia. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

Recommended Articles

Dollar holds above 100 near a 3-month high — three Fed speakers and a $69 billion auction land tonight The dollar index closed at 100.43 on Monday, its highest close since late July, after a weekly gain of about 1% — the best in more than three months — and is holding above the 100.00 handle in Asia. Three Fed officials speak tonight alongside a $69 billion two-year note auction, the first leg of $183 billion of Treasury supply this week.

Author Suzie

Sep 22, Tue

The dollar index closed at 100.43 on Monday, its highest close since late July, after a weekly gain of about 1% — the best in more than three months — and is holding above the 100.00 handle in Asia. Three Fed officials speak tonight alongside a $69 billion two-year note auction, the first leg of $183 billion of Treasury supply this week.

October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changed Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.

Author Irene Q.

Sep 23, Wed

Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.

Memory chips surge, Nasdaq notches a second straight record close — why the Dow fell 185 points anyway Micron gained 5%, SanDisk 6.8%, Seagate 4% and Western Digital 3% as the memory complex led the Nasdaq Composite to a second consecutive record close of 27,244.28. But the Dow fell 185 points as JPMorgan, Wells Fargo and Schwab slid more than 3% each — a split tape that says more about positioning than about the economy.

Author Irene Q.

Sep 23, Wed

Micron gained 5%, SanDisk 6.8%, Seagate 4% and Western Digital 3% as the memory complex led the Nasdaq Composite to a second consecutive record close of 27,244.28. But the Dow fell 185 points as JPMorgan, Wells Fargo and Schwab slid more than 3% each — a split tape that says more about positioning than about the economy.

Gold Price Forecast: XAU/USD drifts toward $4.300 with bears gaining traction Gold (XAU/USD) retraces Tuesday’s gains on Wednesday and drifts lower, approaching the $4,300 area as the US Dollar Index (DXY) rallies further amid high US Treasury yields.

Author FXStreet

Sep 23, Wed

Gold (XAU/USD) retraces Tuesday’s gains on Wednesday and drifts lower, approaching the $4,300 area as the US Dollar Index (DXY) rallies further amid high US Treasury yields.

US input costs rose at the fastest pace in four years — the September flash PMI beat is an inflation story, not a growth story US September flash PMIs came in far above expectations, with the composite at 58.4, a five-year high. But the detail that moved markets was input cost inflation at its fastest since October 2022, driven by fuel, transport and supply shortages. Brent is back above $100 and the 10-year Treasury yield has hit its highest since 2007.

Author Suzie

23 hours ago

US September flash PMIs came in far above expectations, with the composite at 58.4, a five-year high. But the detail that moved markets was input cost inflation at its fastest since October 2022, driven by fuel, transport and supply shortages. Brent is back above $100 and the 10-year Treasury yield has hit its highest since 2007.

Popular Symbols