These 2 AI Stocks Are Poised to Trounce the S&P 500 in 2025

The artificial intelligence (AI) revolution isn’t just another tech trend — it’s fundamentally reshaping how value is created in the global economy. Market research firm IDC projects that business investment in AI will generate a staggering $19.9 trillion in economic impact through 2030.

Two AI technology pioneers, SoundHound AI (SOUN 7.46%) and Palantir Technologies (PLTR 1.18%)have already delivered triple-digit returns in 2024, yet their expanding market opportunities suggest significant growth potential ahead. These companies aren’t riding market sentiment, but are converting technological advantages into accelerating revenue growth and expanding market share.

Despite soaring 539% and 322% respectively year to date (as of Dec. 11, 2024), both companies are positioned to outperform the benchmark S&P 500 in 2025 and beyond. Their deep technological moats, proven revenue growth, and ability to capture market share in this emerging $19.9 trillion opportunity create compelling catalysts for sustained market-beating returns.

SOUN data by YCharts

Let’s examine why these AI pioneers warrant serious attention heading into 2025.

An AI voice pioneer

SoundHound AI has been one of the best-performing AI stocks year to date, marking the beginning of what could be a transformative growth story. The company has successfully evolved from a niche automotive voice recognition player into a diversified enterprise AI powerhouse, with its solutions now driving customer interactions across restaurants, financial services, healthcare, and automotive sectors.

The growth trajectory tells a compelling story. Wall Street projects revenue to surge 83% in 2024 and accelerate further to 96% in 2025, fueled by SoundHound’s ability to secure contracts with major brands, including seven of the top 20 quick-service restaurant chains globally.

While tech giants pose ongoing competitive risks, SoundHound’s deep voice AI expertise and expanding enterprise partnerships create meaningful barriers to entry. This competitive moat has caught the attention of institutional heavyweights, with BlackRock, Goldman Sachsand other Tier 1 investors accumulating significant positions in the second half of 2024.

The convergence of enterprise AI adoption and voice-driven customer engagement positions SoundHound at the forefront of a transformative market opportunity, putting the stock on a solid path to produce superior returns to the S&P 500 in 2025.

Data titan unleashes AI’s enterprise potential

Palantir Technologies has emerged as a cornerstone of the U.S.-led AI revolution, with its share price reflecting growing market recognition of its strategic position. The company’s platforms serve as the crucial bridge between enterprises’ most valuable datasets and AI’s transformative capabilities, creating a distinctive moat in an increasingly crowded landscape.

The numbers paint a compelling growth picture: U.S. commercial revenue surged 54% year over year in Q3 2024, complemented by robust 40% growth in government contracts. The company’s new AIP (Artificial Intelligence Platform) has proven to be a powerful catalyst, accelerating adoption across both commercial and government sectors.

While some view Palantir’s selective approach to partnerships as a limitation, this principled stance has strengthened its competitive position, particularly with U.S. government agencies and aligned commercial partners.

The company’s financial foundation remains robust, with over $4.6 billion in cash and adjusted free cash flow on track to exceed $1 billion in 2024, providing ample resources to maintain its technological leadership and fuel future innovations.

This combination of technological leadership, strategic partnerships, and financial strength positions Palantir at the forefront of enterprise AI transformation, with a significant runway for continued growth in 2025.

The case for sustained outperformance

While 300%+ year-to-date gains might trigger valuation concerns, the growth trajectories of SoundHound AI and Palantir reveal companies still in their early expansion phases. These aren’t temporary beneficiaries of AI enthusiasm — they’re architects of enterprise AI adoption.

SoundHound’s transformation from automotive specialist to multi-industry AI powerhouse expands its market opportunity far beyond initial Wall Street projections. The company’s ability to penetrate diverse sectors demonstrates the scalability and adaptability of its core technology.

Palantir’s AIP platform has accelerated enterprise AI adoption across government and commercial sectors, creating deeper client relationships and expanding use cases. The platform’s rapid integration into mission-critical operations suggests current valuations may underestimate its long-term revenue potential.

For investors focused on the next wave of enterprise AI growth, these companies offer exposure to the shift from experimental AI to full-scale operational deployment. Their expanding competitive moats and growing client dependencies point to sustainable advantages in an increasingly crowded market — advantages that ought to compound over time, thereby driving market-beating results.