Other AI Software Stocks You May Not Know
If you follow the AI industry already then you may know more than I do about small companies that are involved in AI software applications. Although I have been involved in the IT industry for more than 40 years, I have not been directly involved in research or development or implementation of AI solutions. I do, however, have the ability (not using AI, but using SA) to perform research and I have uncovered a couple of companies in the AI software industry that I would like to mention. I think it might be interesting to ask ChatGPT to list other public AI software companies, but I will let one of my readers do that and let me know what they find.
First up is BigBear.ai ( BBAI), headquartered in Columbia, Maryland with 665 employees and a market cap of about $350M. According to the July 2022 investor presentation, BigBear.ai has a 22-year history and relationships with the US Navy and other DOD and Intelligence agencies. They are growing revenues at a rapid clip, and they see a $310B addressable AI/ML market opportunity by 2026.
 BigBear.ai
The company has strong financials with approximately 30% YOY revenue growth and gross margins in the 60% to 70% range. Commercial sales have grown from about 1% in 2021 to over 10% in 2022. The strategy they have developed working with the DOD has enabled them to extend their software and services into the commercial market where they see additional opportunities.
In January, the company landed a 10-year multiple award $900 million IDIQ contract with the US Air Force sending their stock skyward. And what I found really interesting is this language that was included in the contract:
Under the terms of the contract, BigBear.ai can also compete for task orders supporting the research and development of new technologies, creation of rapid prototypes, capability testing, and solution implementation.
In other words, this opens the door for BigBear.ai to develop all sorts of new and innovative AI solutions for not just the USAF, but then they can turn around and sell it to their commercial customers too. It is indeed a huge win for this small company that is on the cutting edge of AI technology.
Over the past 1 year the stock price is down -75%, however YTD the stock has risen by more than 240%.
 Seeking Alpha
Another small publicly traded AI software company that I came across in my search is SoundHound AI, Inc. ( SOUN). SoundHound AI sounds very interesting to me. They were founded in 2005 and are currently headquartered in Santa Clara, CA (i.e., Silicon Valley). They have 430 employees, and their mission is simple - to add voice AI to everything.
The co-founder and CEO, Keyvan Mohajer says on their website:
"We believe every product and service should be voice-enabled and that every person should have the same access to technology through a simple interface. Voice AI is part of that promise, making life simpler, more convenient, and safer for more people."
The Why SoundHound page explains in vivid detail why you would want to implement their Voice AI solutions. I mean, who would not want to process speech like the human brain using computers?
 SoundHound AI
I think this is a very compelling niche application of AI software that has relevance in many businesses and industries, and I feel that SoundHound AI has a very good chance of capturing significant market share. The revenue growth has already been quite impressive from less than $8M in 2019 to more than $31M in 2022 and an estimated $95M in annual revenues by 2024.
 Seeking Alpha
The share price has seen a similar pattern over the past year to the other two AI software stocks that I described in previous paragraphs - AI and BBAI. An initial spike in April 2022 after the company went public via a SPAC, followed by a long descent during the remainder of 2022 followed by a slight resurgence in Q1 2023.
 Seeking Alpha
seekingalpha.com |
