The Underrated Side of Artificial Intelligence Investing
Artificial intelligence (AI) has become one of the most transformative technologies of our era, revolutionizing industries from healthcare and finance to e-commerce and entertainment. As companies race to integrate AI into their core operations, investors are seeking opportunities to benefit from this shift. While the spotlight often shines on tech giants like Nvidia, Microsoft, and Alphabet, there are lesser-known players poised for substantial growth.
In this blog post, we’ll explore two underrated AI stocks that have the potential to deliver massive returns in 2025. These are not the household names dominating headlines but rather companies working diligently behind the scenes — innovative, forward-thinking enterprises that are carving their own niche in the AI space.
1. SoundHound AI – Redefining the Role of Voice in AI
Overview: Breaking the Sound Barrier
Founded with the vision to revolutionize how machines understand human language, SoundHound AI (NASDAQ: SOUN) is leveraging its proprietary Voice AI technology to create more intelligent and conversational applications. While the company isn’t a mega-cap tech behemoth, it’s making significant waves in voice recognition and conversational AI — a segment with vast potential as voice interfaces become more integrated into everyday life.
Why SoundHound AI Stands Out
Most investors associate conversational AI with well-known products like Amazon’s Alexa and Apple’s Siri. However, SoundHound is serving a broader spectrum of industries, enabling enterprises to control their data and user experience without relying on tech giants.
Here’s why SoundHound AI is an underrated gem:
- End-to-End Voice AI Platform: Unlike many competitors, SoundHound offers a complete stack that handles automatic speech recognition (ASR), natural language understanding (NLU), and text-to-speech (TTS), eliminating the need for external integrations.
- Growing Enterprise Partnerships: SoundHound powers voice AI functionalities for companies in automotive, hospitality, and telecom industries. Clients such as Hyundai, Snap, and Mercedes-Benz showcase the versatility of their technology across sectors.
- Subscription-Based Revenue: Recently, the company shifted its focus toward a recurring revenue model, providing subscriptions for its voice AI platform. This business model offers scalability and stronger financial visibility.
Growth Drivers in 2025
As natural language interfaces become mainstream across devices, demand for enterprise-level AI solutions will rise. SoundHound is perfectly positioned to meet this demand. Key upcoming catalysts include:
- Expansion in Automotive AI: More vehicles are becoming smart devices with built-in voice capabilities. SoundHound’s voice platform is a natural fit for automakers aiming to differentiate their in-car systems.
- Partnership Expansion: As businesses look for alternatives to tech conglomerates to build custom AI experiences, SoundHound’s white-label solution becomes increasingly appealing.
- Profitability Horizon: Although not yet profitable, SoundHound is expected to significantly narrow its losses in 2025, potentially hitting breakeven as revenue scales.
The Bottom Line on SoundHound AI
SoundHound AI is mostly flying under the radar, but it has a strong foundation and growing list of enterprise clients. As voice interfaces continue to become more essential across industries, this stock could turn out to be a surprise winner. Investors seeking an innovative yet undervalued AI stock should keep an eye on this emerging voice-tech leader.
2. Baidu – The AI Powerhouse Driving Innovation in Asia
Overview: The “Google of China” Embracing AI at Its Core
While Baidu (NASDAQ: BIDU) is best known as China’s premier search engine, it has been transitioning into a cutting-edge AI company over the last several years. From autonomous driving and conversational AI to cloud computing and language models, Baidu has its hands deeply immersed in the future of artificial intelligence.
While its search advertising business continues to generate strong cash flow, its AI initiatives are what make Baidu a stock to watch going into 2025.
Why Baidu Is an Underrated AI Stock
Despite having a market capitalization well below its Western counterparts, such as Google or Amazon, Baidu is packed with innovation and AI-centric businesses already showing traction.
Key differentiators for Baidu include:
- Ernie 4.0 Language Model: Baidu has developed one of the most advanced large language models in China, comparable in capabilities to OpenAI’s GPT-series. Ernie 4.0 powers a suite of tools from chatbots to AI writing assistants and is already being used by thousands of developers.
- Apollo Autonomous Driving: Baidu leads China’s autonomous driving race with Apollo Go, a robotaxi service already operational in major Chinese cities. This direct-to-consumer exposure in AI-powered mobility is rare among AI companies.
- Baidu Cloud: Offering AI-accelerated cloud services, Baidu Cloud supports enterprises trying to modernize their IT infrastructure using AI algorithms, speech processing, and big data analytics.
Growth Catalysts for Baidu in 2025
China’s digital economy continues to push forward despite global geopolitical tensions. Baidu, with its government ties and strong R&D focus, is uniquely positioned to benefit. Here are the pivotal drivers for the company’s future growth:
- AI Monetization: Baidu’s efforts to monetize its proprietary AI models could dramatically enhance earnings. Cloud-based language services and industry solutions are areas expected to see exponential growth.
- Robotaxi Services Rollout: As Chinese authorities expand approvals for autonomous driving, Apollo Go is slated to reach more cities, increasing both brand visibility and revenue scalability.
- Undervalued Equity: Baidu trades at a significant discount compared to U.S.-based AI players, both in price-to-earnings (P/E) and price-to-sales (P/S) ratios. This makes it an attractive buy for long-term investors bullish on AI.
The Bottom Line on Baidu
Despite being overshadowed by American AI giants, Baidu is playing the long game through deep-rooted investments in core AI technologies. Its diverse use cases—from autonomous driving to natural language processing—underscore its capability to influence Asia’s AI trajectory. For investors looking to diversify their AI portfolio with international exposure, Baidu is a compelling and undervalued opportunity.
Conclusion: Shifting Focus to the AI Underdogs
While megacap AI stocks often dominate news cycles and social media buzz, investing in underrated AI players offers the possibility of higher returns and earlier entry points. Companies like SoundHound AI and Baidu are leveraging AI in transformative ways, with looming catalysts poised to drive robust growth in 2025.
Here’s a quick summary of why these two stocks stand out:
- SoundHound AI: Pioneering voice AI, expanding enterprise applications, and evolving toward a scalable subscription model.
- Baidu: Combining search, cloud, autonomous driving, and powerful language models within an AI-focused ecosystem.
As the AI gold rush continues, finding diamonds in the rough may be more rewarding than simply following the herd. For patient, growth-oriented investors, these two underrated AI plays could become major portfolio drivers in the years ahead.
