There are a few smaller, beaten-down artificial intelligence (AI) names that have the potential to be multibaggers this year if things fall right. Let's look at three down-in-the-dumps AI stocks with big potential to buy now.
1. SoundHound AI
NASDAQ: SOUN
Key Data Points
Down nearly 70% from the highs it hit last fall, SoundHound AI (SOUN 4.87%) has the potential to rebound and be a multibagger winner. The company has been putting up strong revenue growth, with its revenue doubling last year and climbing 59% in the fourth quarter. It's also begun to see strong margin improvement, with its adjusted gross margin expanding 800 basis points last quarter to 60.5%.
Meanwhile, the company still has a big opportunity in front of it, as it takes its AI voice technology and applies it to the virtual agent technology it gained from its acquisition of Amelia to create a voice-powered agentic AI platform. This sets the company up to be a leader in customer service and call center agentic AI, as it will be able to provide AI agents that can interact with customers more naturally and better understand their intent than a regular AI agent.
If SoundHound can continue its rapid revenue growth and gross margin expansion, while heading toward profitability, the stock could have a big upside from here.
2. UiPath
NYSE: PATH
Key Data Points
Down more than 40% off its highs and trading at a forward price-to-sales (P/S) multiple of only 3.6 times this year's analyst estimates, with a forward price-to-earnings ratio (P/E) of just 15 times, UiPath's (PATH 7.35%) stock has the potential to see a big turnaround this year and be a multibagger winner from here. The robotic-process automation (RPA) company has been in the middle of metamorphosing into an agentic AI orchestration platform where it can manage both software bots and AI agents, and direct them to the tasks for which they are best suited in the most cost-efficient manner.
The company is in the early stages of its journey, but it is seeing some solid underlying signs that its platform is beginning to resonate with customers. Last quarter, its AI product annual recurring revenue (ARR) grew 25% for customers, with ARR of $100,000 or higher, and it saw its best large-customer ($1 million ARR) growth in two years. Meanwhile, its net new ARR growth accelerated for the first time in years.
As AI agents proliferate, organizations will begin to need a centralized management strategy. UiPath provides a unified platform that allows customers to orchestrate and govern agents across their entire multivendor ecosystem, while also allowing them to save money by assigning its software bots to less complex, rule-based tasks. That could really position the company to see accelerated revenue growth in the near future, which should drive the stock higher.
Image source: Getty Images.
3. GitLab
NASDAQ: GTLB
Key Data Points
Down nearly 60% from its recent highs, GitLab (GTLB 7.60%) is another cheap stock with big potential. The company is trading at a forward P/S multiple of 3.5 times based on fiscal 2027 (ending January 2027) analyst estimates. Excluding its net cash, its enterprise-value-to-sales ratio is below 2.5 times.
While the company issued conservative guidance calling for only 15% to 17% revenue growth this year, it looked like management wanted to set a low bar to easily jump over, with the stock already down in the dumps. However, the introduction of a hybrid seat-plus consumption pricing model (combining a fixed, recurring per-user fee with variable charges based on product usage) and its Duo Agent Platform, which uses consumption credits, should eventually be strong growth drivers and help the company capture more revenue from the increased value its DevSecOps (development, security, and operations) platform is now providing customers. It is also starting to offer more à la carte options to price-sensitive customers who want AI features without fully upgrading to its Ultimate tier, and it's adding new sales reps.
If GitLab can jump past revenue estimates, I think the stock could be a multibagger from here. I also think, given the value of its platform and the stock's low valuation, that it has high potential to be an acquisition candidate.
