Two AI Stocks Crushed 60%+ This Year — Here's Why Savvy Investors Are Loading Up

The AI sector’s been taking hits lately, with money flowing toward defensive plays. But beneath the surface, some seriously undervalued opportunities are staring investors in the face.

SoundHound AI (SOUN) and C3.ai (AI) are down 62% and 88% respectively from all-time highs — yet their fundamentals tell a completely different story.

SoundHound’s Voice AI Play

SoundHound isn’t just another chatbot company. Their Polaris multimodal model handles real-time speech processing across nearly 30 languages with minimal latency, even in noisy environments. Their recent Amelia 7.0 launch shows serious agentic AI chops — think autonomous agents that can think, reason, and execute without human intervention.

Here’s the kicker: voice commerce integration with restaurants and car manufacturers. Imagine ordering lunch through your car’s infotainment system hands-free. That’s the kind of use case that actually scales.

Q1 numbers? Revenue jumped 151% YoY to $29.1M. The company’s sitting on $246M cash with zero debt. Management guided 2025 revenue to $157-177M range.

Market perspective: Voice and speech recognition is expected to balloon from $19.1B (2025) to $81.6B by 2030. Conversational AI goes from $13.1B to $55.1B in the same window. SoundHound’s positioned to grab meaningful share — though margin compression from recent acquisitions is a near-term headwind they’re actively working through.

C3.ai’s Enterprise Fortress

C3.ai has spent $3B+ since 2009 building enterprise AI infrastructure. They’re offering 131 turnkey applications — most competitors are still custom-coding everything.

The Microsoft partnership expansion (November 2024) is the real catalyst. By Q3 FY2025, they signed 28 new Azure agreements (460% QoQ jump), shortened sales cycles by ~20%, and hit 621 targeted customer accounts. 71% of their Q3 agreements came through channel partners — meaning distribution is finally clicking.

Amazon partnership + McKinsey QuantumBlack collab = multi-pronged growth engine.

Financials: 26% YoY revenue growth, meaningful FCF improvement, $724.3M cash, zero debt. FY2025 guidance shows 25% YoY revenue increase.

One concern: Baker Hughes reseller deal expires June 2025. But they’ve already locked in replacement contracts. Q3 operating loss of $23.1M beat projections — management expects FCF positive in Q4.

Context: Global enterprise applications market should nearly double from $295.5B (2025) to $550B+ (2034).

The Valuation Angle

SoundHound trades at ~40x sales (3-year avg: 35.3x). C3.ai at ~8x sales (5-year avg: 12.2x). Even accounting for premiums on growth, C3.ai looks particularly mispriced.

The broader picture? When capital rotates back into AI infrastructure plays — and demand remains strong — these dips could look like steals in hindsight.