As This Company Shows, Smaller AI Stocks May Offer Bigger Returns Going Forward

The past 18 months have been great for just about any stock related to artificial intelligence (AI). However, the biggest moves have occurred in massive, big-tech companies. These companies have the capital to move in quickly and build out their AI infrastructure, after all.

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  • However, the real opportunity now may be in smaller companies playing to niche corners of the AI trend. That’s because it’s easier for a smaller company to double its earnings or market cap than a multi-billion-dollar tech giant.

    One smaller play is SoundHound AI (SOUN). The company’s AI voice technology services are logical place for many AI players to move into.

    SoundHound’s shares soared following better-than-expected earnings and the announcement of a new partnership.

    While shares are already up over 90% in the past year, there’s still more room for this company, with a market cap of under $2 billion, to run.

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  • Action to take: Speculative investors may like shares here, as there’s likely more upside ahead in the coming months. As with any small-cap tech stock, expect some big daily swings in price, which could be used to add to that position.

    For traders, the July $6 calls, last trading for about $0.60, could see high double-digit returns on a further trend higher for this small-cap AI stock.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.

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