1 Hypergrowth Tech Stock to Buy in 2025

It never hurts to plan ahead.

One of the biggest hypergrowth stocks in the market is a terrible buy now, but that should change in 2025. An overheated stock price should cool down in the coming months, while the underlying long-term success story remains.

As a result, I did not touch the shares SoundHound AI (NASDAQ: SOUND) right now. At the same time, I am willing to jump if and when the rising stock price comes back down.

Here’s why I’m excited about the future of SoundHound AI, and what I need to see before buying the stock again.

SoundHound AI has a great future.

Voice commands are making their way into many industries. Drive-through order windows and mobile phone-based menus are already popular examples, along with in-car infotainment systems and various consumer electronics. The usual tech giants all have some kind of voice interpretation technology going on, including Appleis Siri and AmazonAlexa assistants.

Despite the presence of household names in the pocket, the little SoundHound AI is winning voice control contracts all over the place. The company already has long-term contracts with several automakers and fast-food chains. The list is growing, and so is SoundHound AI’s product portfolio. Just this month, for example, the company combined its two leading technologies to enable food ordering through your car stereo.

So this little company is going places and I can’t wait to see the stock building value over the long term.

But I’m not a SoundHound AI buyer right now. Instead, I sold about half of my position in December, locking in gains from a speculative price rise.

SoundHound AI quickly built a following in well-known meme stock channels online, setting the stock up for an upward price surge. The stated idea was to take advantage of a high short seller interestforcing bearish investors to hedge their bets in a so-called short squeeze. The move seems to have peaked over the holidays, and the stock is now trading about 47% below the top of that price peak.

I look forward to rebuilding my decimated SoundHound AI position, but it’s still too early. The stock seemed too expensive in the spring of 2024, when a small investment from Nvidia inspired rumors about a potential purchase or perhaps an exclusive collaboration. The rumors did not materialize and SoundHound AI’s chart never even reached $9 in that bullish cycle.

Again, I have high hopes for SoundHound AI’s long-term business prospects. However, many things can go wrong along the way and the stock has not yet gained the high values ​​it has seen in recent weeks. The price to sales ratio reached 110.5 on December 26. It returned to 73 sales times on January 13, but it is still too much.

The Story Continues

SoundHound AI deserves a closer look if the stock price returns to single-digit territory. I am also monitoring how the company’s business is developing. The November third-quarter report showed robust revenue growth and lower net losses, and management provided ambitious revenue guidance for the next two years.

So the business performance of SoundHound AI is on track. The meme stock craze should fade in the next couple of months. Much of the speculative action likely went down in December, as indicated by lower prices and thinner trading volume.

I am ready to buy back the shares of SoundHound AI that I sold, but only if the price drop continues from about $13 per share to $6-$7. Your mileage may vary, of course. It is difficult to think of a proper assessment on small, but fast growing, like this technology.

Have you ever felt like you missed the boat on buying the most successful stocks? So you’ll want to hear this.

On rare occasions, our expert team of analysts issue a “Double Down” action. recommendation for businesses that think they are about to start. If you are worried that you have already lost your chance to invest, now is the best time to buy before it is too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled in 2009, you would have $341,656!*

• Apple: if you invested $1,000 when we doubled in 2008, you would have $44,179!*

• Netflix: if you invested $1,000 when we doubled in 2004, you would have $446,749!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” actions »

* Stock Advisor returns from January 13, 2025

John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of The Motley Fool’s board of directors. Anders Bylund has positions in Amazon, Nvidia and SoundHound AI. The Motley Fool has positions in and recommends Amazon, Apple and Nvidia. The Motley Fool has a disclosure policy.

1 Hypergrowth Tech Stock to Buy in 2025 was originally published by The Motley Fool