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SoundHound AI (NASDAQ: SOUN) has been an incredibly popular AI investment pick over the past year. It first gained fame when it was revealed that AI giant Nvidia purchased a stake. Since the start of 2024, the stock has risen more than 350%, but it was up more than 1,000% in December. Part of this downfall occurred because Nvidia sold its entire stake in SoundHound AI, although the broader AI sell-off also harmed the stock.
Although SoundHound AI has been hit rather hard by sell-offs, it could still be a successful investment if it continues its growth trajectory.
But is it enough to turn $10,000 into $1 million? Let's take a look.
SoundHound would need to become a world-class software company to make you a millionaire
For an investment to turn $10,000 into $1 million, it must increase in value by 100 times. This isn't a common occurrence, but it has happened multiple times in the stock market, most of the time right under an investor's nose.
SoundHound AI has a market cap of $3.9 billion, so it would need to be an almost $400 billion company in order to make you a millionaire from a $10,000 investment. That's a tall task, as some examples of $400 billion companies include giants like Netflix, Costco, and Procter & Gamble. Even some of the largest software companies like Salesforce ($268 billion) and Adobe ($169 billion) haven't reached that threshold yet.
So, SoundHound likely won't turn $10,000 into $1 million anytime soon, but that doesn't mean it can't be a successful investment.
SoundHound's software is seeing rapid adoption in multiple areas
SoundHound AI is an AI company (that should be pretty obvious from its name), but instead of focusing on text input into AI models, it focuses on audio inputs. Most of the generative AI models used today don't have the option for an audio input, which is a problem when no keyboard can be used, like in a drive-thru or while driving. This is where having top-tier audio recognition software is critical, and SoundHound AI provides that to its clients.
This caused SoundHound's revenue to rapidly grow, increasing by 101% to $34.5 million in Q4. That growth is expected to persist throughout 2025, with management guiding for $157 million to $177 million in revenue, which indicates 97% growth at the midpoint. That's an impressive growth rate, but SoundHound will need to continue that growth for multiple years to even come closer to becoming a 100-bagger.
One metric management provides to investors to give them insights into future growth is revenue backlog, which measures the remaining value of the contracts it has signed. At the end of Q4, this figure stood at $1.2 billion. Even if you subtract out the 2025 revenue prediction, that leaves over $1 billion in remaining contract value, which indicates that SoundHound will likely see this explosive growth continue for a few years.