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2024 has been the year of the artificial intelligence (AI) boom. Mega-cap stocks like Nvidia and Broadcom have soared to incredible heights thanks to their exposure to the AI industry.

However, the emerging AI sector includes more than just the giant chipmakers; it also includes AI application developers. So, let's dig into one such company, SoundHound AI (NASDAQ: SOUN), to see why it's a name investors need to know ahead of 2025.

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What does SoundHound AI do?

In a nutshell, SoundHound AI is a voice AI company, meaning it develops software that helps humans communicate with AI models. Most people are familiar with how this works. For example, if you've ever asked an Amazon Alexa-enabled device a question, your voice was used to trigger a response from an AI model.

However, one thing that sets SoundHound apart is that unlike Amazon's Alexa, Apple's Siri, or other big-tech sponsored devices, SoundHound is a relatively small company focused on just voice AI. That is, SoundHound's AI tools are not linked to specific branded hardware, like an Amazon Echo or Apple iPhone. Instead, SoundHound works with clients to integrate voice-enabled AI features using their own equipment.

Accordingly, companies that may be hesitant to share their data and introduce big tech to their operations (and, in turn, their customers) may be more comfortable with a company like SoundHound. What's more, SoundHound is also a leader in the space. It supports 25 languages and can understand many accents within its language library.

Finally, the proof is in the pudding. Global brands like Kia, Honda, and Krispy Kreme have adopted SoundHound's technology because of its speed, accuracy, and ability to deliver real-time, humanlike conversation.

How are SoundHound AI's financials?

Turning to the company's financials, it's important to note that SoundHound is squarely in the growth stage of its lifecycle. At this point, SoundHound needs to increase its revenue by landing new clients and expanding its relationships with existing clients.

And on that front, the company is performing well. Total revenue in its most recent quarter (ended Sept. 30) grew to $25 million, up 89% from a year earlier.

Moreover, SoundHound's client base has expanded, thus decreasing its reliance on any particular customer.

For example, one year ago, the company's largest client accounted for 72% of SoundHound's revenue; today, its largest client provides only 12% of its total revenue. Similarly, automotive customers represented 90% of SoundHound's customer base one year ago and now represent less than 25%.

To sum up, SoundHound AI is growing its list of customers as the company expands into new industries like healthcare, financial services, and insurance while maintaining its already established partnerships in the restaurant and automotive sectors.

Is SoundHound AI stock a buy now?

It should go without saying that SoundHound AI is not a stock for every investor. The company has yet to turn a profit and does not generate positive free cash flow. That puts the stock out of bounds for value investors or those seeking passive income from their investments.

However, for growth-oriented investors, SoundHound is a stock worth considering. Its rapid revenue growth, coupled with its cutting-edge voice AI technology, make it a compelling choice for investors seeking shares in a hypergrowth stock within the AI sector.

Should you invest $1,000 in SoundHound AI right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Amazon and Nvidia. The Motley Fool has positions in and recommends Amazon, Apple, and Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.