Many of the best-performing tech stocks over the last year were rebounding from the market sell-off in 2022. Similarly, some of next year's biggest winners will likely be stocks that are currently underperforming.
Regardless of a stock's near-term performance, if the company consistently experiences robust growth, you can be confident the stock will move higher sooner or later. With that said, here are two stocks that are ready to soar in 2025.
1. SoundHound AI
SoundHound AI's (NASDAQ: SOUN) conversational-voice products are seeing strong customer adoption, and it continues to innovate with the introduction of the Polaris multilingual model that delivers superior accuracy against competing artificial intelligence (AI) models. The stock soared last year but has been rangebound in recent months. As the company continues to post robust growth, the shares could rocket to new highs in 2025.
Companies are choosing SoundHound's voice AI for smart ordering and customer service, which is a massive opportunity. SoundHound is a small company with just $13 million in quarterly revenue, but it has been working at this for 20 years and now has the right technology at the right time.
SoundHound is an innovator in generative AI-powered voice assistance, and that bodes well for its long-term prospects. Polaris delivers a better user experience at lower cost, which is leading to strong customer adoption. Its capabilities will pave the way for new products and markets the company can expand into.
The company has enjoyed tremendous adoption in the restaurant and automotive industries, but it is preparing to rapidly expand into more. SoundHound is already seeing retail businesses adopt its technology, including Planet Fitness that is using the company's Smart Answering service.
Bloomberg Intelligence expects the generative AI market to explode from $40 billion in 2022 to $1.3 trillion within the next 10 years. SoundHound's high rate of growth shows this estimate may not be far off the mark. The company's market cap of just $1.7 billion may significantly undervalue the company's future worth and create massive returns for investors.
2. Opera
Opera (NASDAQ: OPRA) holds a low single-digit share of the mobile- and desktop-browser markets, but it's a solid business that is growing at double-digit rates. The stock has doubled off its 2022 low but trades at a modest valuation that could lead to excellent returns.
The Opera browser may never go toe-to-toe with leading browsers like Chrome or Safari, but Opera has been around for many years and has 298 million monthly active users. The company monetizes its browser through advertising, revenue sharing with search partners, licensing, and other services. Through the first half of 2024, revenue grew 17% year over year.
Opera is benefiting from the Digital Markets Act in Europe that evens the playing field with dominant platforms from Apple, Alphabet's Google, and Microsoft. In the second quarter, the company saw an increase in the number of smartphone users throughout the European Union who chose Opera as their default browser.
Moreover, innovation has been a key driver of user adoption. It offers a built-in AI assistant powered by OpenAI's ChatGPT that creates better recommendations from the web and potentially more monetization opportunities with Opera's search partners. The company earns a share of advertising revenue with search partners like Google if a user clicks on an ad on the search-results page.
On that note, e-commerce is the company's fastest-growing ad vertical. This will be a catalyst in the upcoming holiday season when more users will be searching and clicking links to shop online. One more strong earnings report might be all it takes to send the stock to new highs.
The stock's valuation is a bargain compared to Wall Street's earnings estimates. Analysts expect Opera's earnings to grow 24% in 2025, but investors can buy shares at a modest forward price-to-earnings ratio of 15. This is cheap and well below the valuation of other digital-media platforms that make money from advertising.
Should you invest $1,000 in SoundHound AI right now?
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Ballard has positions in SoundHound AI. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft, and Planet Fitness. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
2 Monster Stocks That Could Soar in 2025 was originally published by The Motley Fool