AI Stocks for Growth: SoundHound AI and Applied Digital

SoundHound AI and Applied Digital are two AI stocks that could experience significant growth. SoundHound AI creates voice AI products for various industries and saw a 151% YoY increase in revenue to $29 million in Q1 2025. Applied Digital designs and operates data centers for tech companies to deploy AI applications, with revenue growing to $52.9 million in its fiscal third quarter. Both companies have the potential to take a share of the growing AI market, with SoundHound's voice AI agents market projected to reach $47.5 billion by 2034.

Two prominent AI stocks, SoundHound AI (SOUN) and Applied Digital (APLD), are gaining attention for their significant growth potential in the AI market. SoundHound AI, a leader in voice AI products, reported a 151% year-over-year (YoY) increase in revenue to $29.1 million in Q1 2025 [2]. Meanwhile, Applied Digital, a key player in the data center infrastructure market, saw its revenue grow to $52.9 million in its fiscal third quarter [3].

SoundHound AI's impressive revenue growth is driven by its innovative voice AI solutions, which are being adopted across various industries. The company's Q1 2025 results also included a comfortable cash position of $246 million and no debt, indicating strong financial health [2]. The company's participation in the Chicago show to reveal restaurant-industry tech waves and its strategic partnerships with tech giants further highlight its potential for growth.

Applied Digital, on the other hand, is focusing on building scalable, asset-heavy infrastructure to meet the explosive demand for AI workloads. The company's core thesis is to leverage stranded power and AI demand to generate long-term cash flow. The Ellendale HPC Campus in North Dakota, a 400 MW facility, is a strategic bet to capitalize on this trend [3]. If executed well, the Ellendale campus could become a cash-generating engine, with long-term leases providing stable cash flow.

Both companies are positioned to take a share of the growing AI market. SoundHound's voice AI agents market is projected to reach $47.5 billion by 2034 [1]. Meanwhile, the AI infrastructure market is a gold rush, with demand for GPU clusters and liquid-cooled data centers surging [3].

However, both companies face challenges. SoundHound AI's Q1 non-GAAP net loss of $0.06 and the recent downward revision of its price target by Wedbush from $22 to $15 indicate that the market is cautious about the company's near-term earnings [2]. Applied Digital, while reporting strong revenue growth, faces operational and strategic risks, including revenue volatility, debt overhang, customer concentration, and execution uncertainty [3].

Investors willing to tolerate volatility and closely monitor these companies' progress may find the rewards worth the risk. For others, the capital-intensive nature of the business and the uncertainty of a REIT conversion could justify a wait-and-see approach.

References:
[1] https://seekingalpha.com/article/4805565-soundhounds-ai-comeback-story
[2] https://www.timothysykes.com/news/soundhound-ai-inc-soun-news-2025_05_27/
[3] https://www.ainvest.com/news/applied-digital-ai-infrastructure-play-high-risk-high-reward-opportunity-scalable-capital-intensive-sector-2507/