SoundHound AI will grow over the next 7 years. Here is 1 reason why.

There is a very simple reason I expect SoundHound AI (NASDAQ: SOUND) stock to beat the market over the next seven years. The company has a huge backlog of long-term contracts and other backlogs just waiting to turn into cash revenue. Market makers seem to have missed this as yet untapped source of future sales — and the average contract in the SoundHound AI pool is a seven-year deal.

The rest was worth $723 million in the second quarter. That’s up from $682 million in the previous quarter and $339 million in the year-ago period. In the summer of 2023, the backlog was growing at an annual rate of 20%. Now, the year-over-year growth rate has accelerated to 113%. The company is busy securing new contracts.

Meanwhile, SoundHound AI began collecting subscription fees and other revenue from previously dormant contracts. As a result, his income is skyrocketing right now:

Where SoundHound AI customers come from

So far, most of SoundHound AI’s voice control sales are based on the twin pillars of automotive and restaurant customers.

• Parent of Fiat, Chrysler and Maserati Stellar (NYSE: STLA) is rolling out SoundHound AI voice commands with ChatGPT integration for its European and Japanese brands these days. American installations should not be far behind.

• Recent restaurant deals include popular fast-food chain White Castle, sandwich-slinger Jersey Mike’s and sports bar chain Beef ‘O’ Brady’s. The names are becoming familiar, and you may have already interacted with SoundHound AI’s computer-controlled voice command systems.

• The company is making strategic acquisitions in the artificial intelligence (AI) space for voice controls and e-commerce integration. These offerings should strengthen SoundHound AI’s hold on its core target industries while expanding its reach into new sectors.

This little AI maven is going places, and the revenue collection is just beginning. Keep an eye on SoundHound AI’s backlog as it turns into a decent revenue stream over the next few years. As the company’s sales increase, the stock price should follow suit.

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Anders Bylund holds positions in SoundHound AI. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.

Prediction: SoundHound AI will grow in the next 7 years. Here is 1 reason why. was originally published by The Motley Fool