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Investors looking for promising artificial intelligence (AI) stocks under $20 for 2025 should keep an eye on BigBear.ai (BBAI) and SoundHound AI (SOUN). Both of these companies have seen their stock prices gain over the past year, fueled by the growing adoption of artificial intelligence (AI) technologies.
BigBear.ai, a company specializing in AI-powered decision intelligence solutions, has witnessed a stock price increase of about 94% in six months. On the other hand, SoundHound has outpaced BBAI with its returns, delivering an extraordinary 206% increase in stock price over the same period. Moreover, SOUN stock has gained 568% year-to-date. This growth reflects high demand for its advanced voice AI technology.
While both companies operate in AI-driven sectors, their unique offerings and growth trajectories present distinct opportunities. With this backdrop, let’s explore which of these AI stocks under $20 is the best buy for 2025.
The Case for SoundHound AI Stock
SoundHound AI is a solid stock to capitalize on the rapid expansion of conversational AI. With an expanding portfolio across key verticals such as automotive, customer service, and restaurants, the company is tapping into markets set for massive growth.
SoundHound’s innovative AI agent solution revolutionizes customer service by enhancing employee productivity and customer satisfaction. With increasing adoption across financial services, healthcare, and retail, SoundHound is expanding its addressable market. Additionally, increasing global demand for voice AI, particularly within the automotive sector, bodes well for future growth.
The company’s automotive portfolio is already seeing strong momentum, especially in the electric vehicle (EV) segment. SoundHound has secured significant deals with multiple EV manufacturers, including a major agreement with a Middle Eastern EV OEM. With their technology already deployed in vehicles on the road, this segment is poised for exponential growth.
SoundHound’s financial performance has been impressive, with recent quarterly revenue increasing by 89% year-over-year, reaching over $25 million. The company is lowering its reliance on large, one-time deals by building a diversified customer base, including major Fortune 500 companies. Its SaaS-like revenue model is delivering more predictable and recurring income, enhancing financial stability.
Further, SoundHound’s strategic acquisitions and partnerships are already paying off, with a growing backlog of bookings and increased market penetration. The company’s efforts to diversify its customer portfolio and expand geographically are reflected in a more balanced revenue concentration, setting the stage for sustained growth.
Given the significant rise in SOUN stock, Wall Street analysts maintain a “Moderate Buy” consensus rating.
The company's strong financials, diversified customer base, and opportunities in automotive, AI agent, and restaurant business units, present a solid base for growth. Further, SOUN's transition toward a software-as-a-service revenue model adds stability, reducing reliance on large, one-time contracts and paving the way for more predictable income streams.
The Case for BigBear.ai Stock
BigBear.ai is another compelling long-term investment within the growing AI space. This penny stock focuses on critical industries, including digital identity, national security, and supply chain management. With investments in these sectors likely to increase, BigBear.ai has the ability to deliver solid growth in the long term.
The company is likely to benefit from its focus on growing its customer base and increasing revenue per user. Additionally, BigBear.ai is scaling its operations through strategic partnerships and broadening its AI offerings, which further enhances its long-term prospects.
A key driver of BigBear.ai’s future growth is its ConductorOS platform, which orchestrates AI, data, and sensor technologies. This platform has the potential to become a significant revenue contributor. Further, BigBear.ai’s focus on strategic acquisitions will bolster its AI capabilities and accelerate its growth rate. The company’s recent acquisition of Pangiam strengthened its Vision AI portfolio and positions it well within the expanding AI-powered security and identity markets.
Financially, BigBear.ai is on solid footing. In Q3 2024, the company reported a 22.1% year-over-year revenue increase and improved its gross margin to 25.9% by focusing on higher-margin commercial solutions. The company is also optimizing its cost structure and reducing cash burn to enhance financial stability. Notably, its order backlog surged to $437 million by Sept. 30, up from $266 million just three months earlier, signaling strong demand for its solutions.
Analysts are optimistic about BigBear.ai’s future, with a “Strong Buy” consensus rating. This outlook reflects confidence in the company’s ability to continue expanding its footprint in the AI segment and generate significant returns for investors over time.
Which is the Better AI Stock to Buy for 2025?
Both companies are well-positioned to capitalize on the AI revolution, driven by increasing demand across industries. However, regulatory scrutiny and cautious adoption by governments may temper growth rates for some AI-driven businesses. For BigBear.ai, which has high exposure to defense and government projects, this cautious approach could lead to uneven revenue in the short term, limiting the upside potential of the stock - tilting the scales in Soundhound's favor for the moment.
