Could This Artificial Intelligence (AI) Stock Be the Next Palantir?

Core Insights - SoundHound AI's shares surged by nearly 875% in 2024 due to record third-quarter revenue performance and increasing adoption of conversational AI solutions [1] - Palantir Technologies' stock gained almost 385% in 2024, driven by demand for its AI Platform, strong financial performance, and inclusion in the S&P 500 index [2] Financial Performance - SoundHound AI's revenue jumped by 89% year over year to $25.1 million, while Palantir's revenue increased by 30% year over year to $726 million [10] - SoundHound AI expects 2024 revenue between $82 million and $85 million and 2025 revenue in the range of $155 million to $175 million [7] - SoundHound AI reported a GAAP operating loss of $33.7 million in the third quarter, while Palantir posted a GAAP operating income of $113.1 million [11] Customer Base and Market Position - SoundHound AI reduced customer concentration risk, with the largest customer accounting for only 12% of revenue in Q3 2024, down from 72% in 2023 [3] - The top five customers now account for less than 33% of revenue, significantly lower than the 90% exposure in 2023 [3] - SoundHound AI is gaining traction in the automotive sector, particularly in the electric vehicle market, and has signed contracts with multiple EV players [4] Product and Technology - SoundHound AI's Polaris foundation model is trained on billions of real conversations and over 1 million hours of audio, improving accuracy and reducing hosting costs [6] - The model powers almost one-third of all AI interactions for the company's restaurant customers [6] - SoundHound AI is a market leader in phone ordering solutions in the restaurant industry, handling over 100 million customer interactions [5] Competitive Landscape - SoundHound AI's applications are not integral to business operations, making it easier for clients to switch to competitors like Amazon's Alexa and Google's Assistant [12][13] - Palantir's solutions are deeply entrenched in client operations, providing a competitive edge through a sticky customer base [12]