Is SoundHound AI, Inc. (SOUN) the Best AI Stock to Buy Under $10?

We recently published a list of 13 Best AI Stocks to Buy Under $10. In this article, we are going to take a look at where SoundHound AI, Inc. (NASDAQ:SOUN) stands against other best AI stocks to buy under $10.

Fears of an artificial intelligence bubble bursting appear overblown. That’s the sentiment echoed on Wall Street in the aftermath of tech giants delivering better-than-expected quarterly results and reiterating investments in AI infrastructure. Increased investments in AI Infrastructure and other solutions have once again affirmed sentiments in the burgeoning segment that was the catalyst behind US markets powering to record levels last year.

At the beginning of the year, investors became worried that the AI surge might collapse in the aftermath of the Chinese company DeepSeek creating a sophisticated large language model that needed less energy and funding. The news from DeepSeek caused a significant change in market sentiment and led to a decline in AI stocks that had experienced substantial increases for most of the year.

Fast forward, tech giants signaling they will continue to invest in AI and cloud infrastructure is a tailwind that continues to reiterate sentiments around AI stocks. Companies ramping up investments to address capacity constraints in their cloud unit, as others ramp investments in AI-powered servers and data center assets, are a positive for the overall sector.

According to AMD CEO Lisa Su, ordering patterns around everything AI remains strong, signaling people and companies are not making short-term decisions. Initially, there were concerns that companies pursuing opportunities around AI had spent far too much and too quickly to build out infrastructure and would need to go slow. Consequently, tech giants whose valuations had skyrocketed to record highs pulled back significantly as investors remained wary of their long-term outlook amid an uncertain macroeconomic environment that is crumbling amid a ferocious trade war and export controls.

Continued investments in AI should be expected as companies look to strengthen their product and services portfolio while also strengthening their competitive edge. There have been concerns that  heightened regulations and authorities placing guardrails could derail innovations around artificial  intelligence. However, that appears not to be the case.

According to Wedbush Securities global head of technology research Dan Ives, “Innovations around AI are growing at 100 miles per hour  while regulatory pressure is only growing at 35 miles an hour”.

According to Ives no amount of regulation is going to change the heightened amount of spending  around AI. “The use cases are exploding and no amount of regulation is going to change it” said Ives in an interview with CNBC. Ives added:

“In terms of use cases, US commercial businesses are exploding. Right now we have 85 use cases, a year ago we had 10. I think what we are starting to see is more and more that it is across verticals  healthcare financials  government  and retail among others.”

The fact that executives from some of the biggest tech giants have denied they are cutting back spending on servers and data makes the case for why investors should pay attention to some of the AI stocks trading at highly discounted valuations.

Our Methodology

We sifted through Finviz and financial media reports to compile a list of top AI stocks trading below $10. We then selected the 13 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order based on the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database, which tracks the moves of over 900 elite money managers.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

SoundHound AI, Inc. (NASDAQ:SOUN)

Stock Price as of May 12: $8.98

Number of Hedge Fund Holders: 21

SoundHound AI, Inc. (NASDAQ:SOUN) is a software application company that develops voice artificial intelligence (AI) solutions to enable high-quality conversational experiences across the automotive, TV, and IoT sectors. It is one of the best AI stocks to buy as it continues strengthening its AI-powered solutions line. Consequently, the company has achieved an 84.6% revenue growth over the past 12 months, attracting a Buy rating from DA Davidson with a $10 price target.

SoundHound AI, Inc. (NASDAQ:SOUN) remains well-positioned to sustain the outstanding growth given the size of the conversational AI market, which could grow to more than $50 billion in annual revenue by 2030. In pursuit of value in the market, the company has already launched voice-enabled AI agents. It has also introduced Amelia 7.0, designed to enhance business operations with voice-enabled artificial intelligence agents.

Additionally, SoundHound AI, Inc. (NASDAQ:SOUN) is pursuing growth opportunities in China. It has already inked a strategic partnership with Chinese tech giant Tencent.  Consequently, working with Tencent’s Cloud and Smart Industries is essential to bring conversational AI capabilities to automotive solutions. The partnership should help validate SoundHound’s technology and unlock new revenue opportunities.

Overall, SOUN ranks 7th on our list of best AI stocks to buy under $10. While we acknowledge the potential of SOUN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SOUN but that trades at less than 5 times its earnings check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.