Stocks to Watch: AI Winners Poised for Growth in 2025 and Beyond
If you’re seeking to identify the next big winners in the stock market, focusing on the rapid growth rates of companies can lead you to some remarkable opportunities. Recently, artificial intelligence (AI) has emerged as a driving force behind impressive returns for stocks. Notably, SoundHound AI (SOUN) and Broadcom (AVGO) have both seen their stocks double over the past year, and they could potentially reach new heights as we move further into 2025.
Why Focus on Growth?
The secret sauce for selecting winning stocks often lies in analyzing their growth trajectories. As companies innovate with AI technology, those that effectively harness this potential are standing out. Let’s take a closer look at SoundHound AI and Broadcom, two stocks that have captured the attention of investors.
1. SoundHound AI
Conversational voice AI technology is experiencing explosive growth, revolutionizing areas such as customer service and smart ordering. As the demand for voice recognition applications grows, SoundHound AI has been riding a significant wave of momentum. Over the past year, shares have skyrocketed by 135%, and with a relatively modest market cap of $1.7 billion, it’s clear there’s room for further appreciation.
Analysts at Cantor Fitzgerald recently upgraded SoundHound AI to an overweight (buy) rating, setting a price target of $7, suggesting a potential upside of 48% in the next year. The average price target from various analysts hovers around $7.79, indicating strong confidence in the stock’s growth.
A major boost for SoundHound was its recent acquisition of Amelia, which expands its capabilities into serving Fortune 500 companies across industries like banking and retail. When you couple this with a remarkable 54% year-over-year revenue growth in Q2, it’s easy to see why Wall Street is optimistic. While the company has yet to reach profitability, its subscription-based business model, along with royalty opportunities, could pave the way for improved earnings as it scales.
Investors might consider holding SoundHound for the long haul, especially given the enormous potential within the voice AI sector.
2. Broadcom
Next up is Broadcom, a powerhouse in the semiconductor and storage solutions space. With the acceleration of AI adoption in data centers, Broadcom is experiencing a significant surge in demand. The stock has enjoyed a stellar run lately, up 107% over the past year, driven primarily by the skyrocketing need for AI-related solutions in data centers.
Analyst Harlan Sur from J.P. Morgan has also given Broadcom an overweight (buy) rating, backing it with a bold $210 price target. Recent financials reveal a robust 47% year-over-year revenue growth in fiscal Q3, thanks partly to its acquisition of VMware and the booming AI semiconductor sector. Revenue from custom AI accelerators alone has tripled in comparison to last year.
Analysts remain upbeat about Broadcom’s future prospects, projecting a solid recovery in non-AI markets and raising the full-year revenue guidance to $51.5 billion—translating to a year-over-year growth of about 43%. With anticipated annualized earnings growth around 19%, Broadcom appears to present excellent value, particularly given its forward price-to-earnings ratio of 28.
Conclusion
Both SoundHound AI and Broadcom are showcasing impressive growth due to the increasing demand for AI-driven solutions. Whether it’s SoundHound’s innovative voice AI technology or Broadcom’s critical role in the semiconductor market, these companies are well-positioned to capitalize on the AI boom.
Investors should consider adding these stocks to their watchlists, as they may see greater returns in the coming years.
The AI Buzz Hub team is excited to see where these breakthroughs take us. Want to stay in the loop on all things AI? Subscribe to our newsletter or share this article with your fellow enthusiasts.
