Why AI Stock Cerence Was Pushing Higher This Week

Two developments over the past few days have sent Cerence (NASDAQ: CRNC) stock skyward. According to data compiled by S&P Global Market Intelligence, shares of the company -- which specializes in developing artificial intelligence (AI) capabilities for in-car systems -- were rising by almost 13% week to date as of Friday before market open.

Conversation starters

Both developments occurred on Thursday, with the first being Cerence's announcement that its technology packed into Mercedes-Benz's latest in-car "infotainment" system will soon get its initial rollout. This tech, rolled into the storied carmaker's latest version of its Mercedes-Benz User Experience (MBUX), is to be included in the new, soon-to-be-released 2026 electric CLA sedan.

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The automotive incumbent and Cerence have been partnering on MBUX for quite some time. The version that's being introduced with the upcoming CLA features advanced conversational capabilities powered by Cerence's AI solutions. These include neural speech recognition and natural language understanding, among other features, the company said.

Later that day, Cerence scored a victory with the U.S. Patent and Trademark Office (USPTO), which was considering a patent infringement claim made by Korean electronics giant Samsung.

The USPTO granted Cerence's request for it not to move forward with a Samsung effort to challenge the validity of the disputed patents. While such a win doesn't necessarily mean Cerence will ultimately prevail in the case, it does tilt the proceeding in its favor.

Driving forward with AI

Of the two news items, I'd say the Mercedes one is the more significant. Drivers of the German company's cars are now going to have direct, and often meaningful, interactions with Cerence's technology. There's no better way to boost a company's reputation; hopefully for shareholders, the system will perform well on deployment.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Cerence. The Motley Fool has a disclosure policy.