Looking at Wall Street analysts' price targets can be a worthy exercise, because it may identify some stocks with huge upsides you haven't considered. After finding such a stock (at least according to analysts), the best move is to do your own research and see if you can confirm their findings. One stock with massive upside is SoundHound AI (NASDAQ: SOUN), a small artificial intelligence (AI) company.

Gil Luria from D.A. Davidson has a price target of $9.50 on SoundHound's stock. This was last updated on Sept. 30, so the analyst's target is based on the same information that all investors have access to now. That price target indicates around a 60% upside, which would be a fantastic one-year run for the stock.

Is this a legitimate price tag? Or should investors steer clear? Let's find out.

SoundHound's product has already been integrated in several industries

SoundHound AI does what its name implies: It uses AI to help identify and process sounds. While recognizing audio and converting it into something that can be input into a computer is a very broad and useful technology, SoundHound is finding commercial success in two specific areas: restaurants and automaking.

On the restaurant side, the company is helping streamline operations by using its AI model to take drive-thru and mobile orders. The performance of these models often exceeds that of the humans they supplement, allowing restaurants to become more efficient.

On the automotive side, the company has been integrating its technology with various generative AI models to make driving assistants more useful. Its most notable client is Stellantis, and SoundHound's model has been integrated with various makes and models under the manufacturer's umbrella in Europe and Japan.

Those are relatively niche uses for the technology but finding success in a few areas before expanding elsewhere is key when growing a company. The business case is there, but how about its financials?

2025 is slated to be a massive year for SoundHound

SoundHound is still a relatively small company, so its revenue figures may not jump off the page at you. In the second quarter, it generated $13.5 million in revenue, up 54% year over year.

However, it has a revenue backlog totaling $723 million. This shows the huge demand for its technology, but it takes a while to integrate and test out before SoundHound can recognize it as revenue from its partnerships.

Management is bullish that it can start converting some of that backlog into revenue in 2025, so it expects revenue to exceed $150 million next year. That's rapid growth, but if it happens, the $9.50 price target doesn't seem so far-fetched.

Right now, SoundHound stock looks expensive because it trades at 30 times sales.

SOUN PS ratio; data by YCharts; PS = price to sales.

But that's using trailing data. If we plug in management's 2025 revenue projection of $150 million, then its price-to-sales ratio (P/S) tumbles to 11 times forward sales. That would be a pretty cheap valuation, considering that the company would have essentially doubled its revenue at that time.

So SoundHound's valuation could end up being higher than 11 times sales, which would cause the stock to rise. As a result, I don't think the $9.50 price target is out of line.

If management can deliver on what it told investors during its second-quarter conference call, then SoundHound AI will easily be a market-crushing investment next year. Because of that, I think investors can buy the stock if they believe in what management is saying and the company's potential market opportunity.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

It's difficult to make a 147% return in a matter of months, but that's what Nvidia (NASDAQ: NVDA) achieved with a multimillion-dollar investment this year. The investment was one of many AI companies Nvidia decided to back. All were companies that it has worked with in the past, so it presumably knows them quite well. Despite the huge profit, Nvidia appears to be holding on to its fairly recent stock purchases. Investors looking for maximum growth should consider jumping in.

This AI stock could have 1,000% more upside

Less than a year ago, Nvidia ploughed $3.7 million into SoundHound AI (NASDAQ: SOUN) stock. Shares have risen by around 140% since then, but there's reason to believe they could rise another 10 times in value over the long term. But before you invest, there are a few things you need to consider.

At its core, SoundHound AI is a company focused on bringing AI to everything sound-related. From voice assistants to drive-thru ordering, anytime you chat with a speaker, SoundHound AI wants its technology to be there. With more than a decade in operation, the company has amassed more than 200 patents and an impressive customer list that has continued to grow.

In 2022, for example, it signed a seven-year contract with Hyundai to power its voice-driven AI capabilities. Drivers will be able to chat with their vehicles not only to send messages, get directions, or toggle the air conditioning but also to check in on maintenance issues and discuss how the vehicle has been performing. It's impressive stuff. Over the next few years, that giant user manual sold with new cars could be replaced with a simple conversation -- one conducted directly between you and the vehicle.

SoundHound AI has signed several vehicle manufacturers as customers. But it's also in other industries, including restaurants and fast-food chains. Applebee's and White Castle, for instance, are piloting the technology to improve order times and reduce overhead costs. This is perhaps one of the most popular ways we will all be interacting with AI technologies in the near future.

Despite its sizable tech portfolio, growing customer base, and sizable end markets -- not to mention Nvidia's backing -- SoundHound's market cap remains just under $2 billion. To rise 1,000% in value, the company would need to reach a valuation of around $20 billion. That's not much of a stretch in the volatile AI industry, which could be one of the largest growth opportunities in a generation.

Shares trade at a price of 22 times sales, but over the last two years, revenue has grown by more than 150%. If it can replicate these growth rates, shares would trade between 5 and 6 times 2026 revenue. That's a much more palatable valuation, although it will take some patience and execution to get there.

SOUN Market Cap data by YCharts

Should you invest in SoundHound?

Clearly, SoundHound AI's end markets alone would support a $20 billion valuation. According to management, the voice AI market has a total addressable market size of at least $140 billion. SoundHound AI's unique technology can be used across a variety of industries, and its early head start bodes well for its ability to capture a growing share of an otherwise growing opportunity.

But there's a reason SoundHound still trades at a paltry $1.7 billion market cap. The company remains unprofitable, meaning it continually needs to seek financing in order to stay solvent. This limits its ability to invest in research and development, which is perhaps its most valuable use of funds long term.

Research and development spending last year was only around $56 million -- a 30% reduction in its peak spending levels in 2023. Big tech companies, including Apple and Alphabet, are investing billions of dollars in this space. Long-term competition will be intense, and it's not clear whether SoundHound AI has the capital to survive, let alone thrive.

If you're looking for a speculative growth stock with huge long-term potential, SoundHound AI could be for you. Nvidia's backing is certainly a plus. But volatility should remain high, and the potential downside is sizable as well. This is truly a boom or bust investment option for risk-tolerant investors only.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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