10 Most Popular AI Stocks to Avoid Now

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1. SoundHound AI, Inc. (NASDAQ:SOUN)

Year to Date Loss as of May 13: -45.04%

S&P 500 Year to Date Performance as of May 13: 4.92%

SoundHound AI, Inc. (NASDAQ:SOUN) is a software application company that develops independent voice artificial intelligence (AI) solutions leveraged by businesses across automotive, TV, and the Internet of Things. A once popular stock amid the AI boom, it has come tumbling down. The stock has lost about 45% in market value year-to-date while the S&P 500 has gained 4.92%. Likewise, H.C. Wainwright has cut its stock price target to $18 from $26.

The price cut comes against the backdrop of SoundHound AI, Inc. (NASDAQ:SOUN) delivering mixed first-quarter 2025 results. Revenue in the quarter totaled $29.1 million, missing consensus estimates of $30.2 million. While Q1 2025 revenue represented a 150% year-over-year increase, the stock is still being pounded as most of the growth is related to the company’s acquisitions last year.

Over-reliance on acquisitions for growth continues to raise serious concerns about organic growth. The fact that the company does not report growth rates also sends jitters in the investment community. Additionally, SoundHound AI, Inc. (NASDAQ:SOUN) is one of the most popular stocks to avoid now, as it has yet to generate a profit. The company initially set out to turn a profit in 2023 but has struggled to do so. It also faces an uncertain future amid stiff competition from Amazon, Google, Apple, and Microsoft in the voice AI market.

While we acknowledge the potential of SoundHound AI, Inc. (NASDAQ:SOUN) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SOUN but that trades at less than 5 times its earnings check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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