The world of artificial intelligence (AI) is vast and diverse, with numerous tech companies either developing AI software and hardware or utilizing AI solutions created by others. Among these, SoundHound AI (SOUN 7.80%) and Duolingo (DUOL 10.04%) stand out for their integration of homegrown AI systems into their core business models. Here’s why these companies are expected to be leaders in their chosen fields for the foreseeable future.
SoundHound AI: Voice Tech with Serious Growth Potential
SoundHound AI specializes in AI-powered tools that convert human language into machine-friendly commands and vice versa. This technology, rooted in about 20 years of machine learning research, has evolved from song identification to various business-friendly applications. For instance, SoundHound AI’s Houndify system is used in voice-driven phone menus and drive-through ordering systems. With a technology addressing large markets, SoundHound AI is at the beginning of a long growth story.
The company has seen accelerating revenue growth, including a 101% year-over-year increase in its fourth-quarter report. The backlog of untapped contracts and subscriptions surged from $661 million at the end of 2023 to $1.2 billion a year later, indicating a strong pipeline of potential revenue. While the current stock price may be considered high, the growth story is expected to unfold over decades, making it a potential long-term investment opportunity.
Duolingo: Soaring on AI Wings
Duolingo, known for its language-learning platform, is also an AI stock worth considering. Its system combines a user-friendly app with educational theory and linguistics research. The company has expanded its offerings to include music and math courses, leveraging its expertise in teaching through repetition. The introduction of Duolingo MAX, an ultra-premium subscription plan, brings generative AI into the learning experience, allowing for natural conversations with cartoon characters and detailed error explanations.
Duolingo’s AI-powered features not only enhance the learning experience but also optimize advertising content for its users. With a growing base of paid subscribers and a profitable business model, Duolingo is well-positioned for long-term success. Despite its premium valuation, the company’s revenue acceleration trend and vast market potential make it an attractive investment opportunity.
Both SoundHound AI and Duolingo are leveraging AI to drive innovation and growth in their respective fields. As these companies continue to develop and expand their AI capabilities, they are likely to maintain their leadership positions and deliver long-term value to investors.
