There are tons of artificial intelligence (AI) stocks out there. If a tech company isn't making AI software, or the hardware those tools require, it probably uses AI solutions from other tech experts.
The stocks I'm about to show you are no fly by-night AI wannabes, though. SoundHound AI (SOUN +5.07%) and Duolingo (DUOL 2.81%) are building homemade AI systems into their core operations. Read on to see why I expect these companies to be leaders in their chosen fields for the foreseeable future -- and then some.
NASDAQ: SOUN
Key Data Points
A voice tech bark with serious growth bite
SoundHound AI builds AI-powered tools that turn human language into machine-friendly commands -- and vice versa. The technology is based on about 20 years of machine learning research, originally used for song identification but now expanded to many business-friendly situations. For example, you may have encountered SoundHound AI's Houndify system in a voice-driven phone menu or at a local drive-through ordering window.
If that sounds like a pretty useful technology addressing some very large markets in the long run, I'd say you're on the right track.
This company stands near the very beginning of a very long growth story. Yes, SoundHound AI has been around since the digital stone age (before smartphones were a thing) but it shifted into revenue-generating growth mode just three years ago.
And it's off to a tremendous start. SoundHound AI's revenue growth is accelerating, including a 101% year-over-year jump in February's fourth-quarter report:
SOUN Revenue (TTM) data by YCharts
At the same time, the backlog of untapped contracts and subscriptions rose from $661 million at the end of 2023 to $1.2 billion one year later. In other words, the company is signing tons of new deals even as it starts to convert some of the backlog into reportable revenues.
It's been about a week since I suggested waiting until SoundHound AI trades below $7 per share before shoveling cash into your position, while also admitting that I recently bought a few shares at a higher price. April 2025 may not be the best time ever to buy SoundHound AI stock, but you should at least put this name on your watchlist. This little company has a lot of untapped potential to explore, and the growth story could take decades to play out. The exact starting price may not matter a whole lot for a growth stock of this magnitude.
NASDAQ: DUOL
Key Data Points
Soaring on Duolingo's AI wings
You might not think of Duolingo as an AI stock, but I can assure you that it is.
Its language-learning system was always based on human research, pairing a fun and approachable app with legit theory of education and linguistics. The scope has broadened to include music and math courses as well, and the company could eventually address any topic people usually learn through repetition.
But it doesn't stop there. The ultra-premium subscription plan called Duolingo MAX brings generative AI into the learning experience.
The "video call" feature lets you have natural conversations with some of the cartoonish characters in the Duolingo world. The system responds to your statements in the same way ChatGPT might, because it uses the same technology. This approach is different from rote repetition, opening up the door to teaching more complex subjects on the Duolingo platform someday.
The AI-powered MAX service can also explain your errors in the course of normal Duolingo courses. This feature adds value to the learning experience, giving you the key to the test instead of letting you figure out on your own whether you misunderstood a plural noun form or picked the wrong participle. If it was both, MAX will tell you that too.
Duolingo also uses machine learning to optimize its advertising content for learners in the ad-supported cohort, and that effort was directly based on the company's existing database of learning experiences.
Like SoundHound AI, you have to pay a premium price for Duolingo shares today. The stock is trading at a kingly 177 times trailing earnings and 20 times sales, making some of the AI industry's leading market darlings look affordable by comparison.
But you also get the same beautiful revenue acceleration trend:
DUOL Revenue (TTM) data by YCharts
Duolingo is barely scratching the surface of an enormous global market for digital learning experiences, and it also should widen its profit margins over time. The group of paid subscribers is growing faster than the total user base, which shows that the MAX program is striking a chord with Duolingo's users. The company is also profitable and equipped with a cash balance of $878 million on a debt-free balance sheet.
This little education expert is going places in the long run.
