3 HOT AI Small Cap Stocks in August 2025

Summary

In this video, the presenter discusses the performance of three AI stocks—Soundhound, Tempest AI, and Big Bear AI—highlighting their potential for the remainder of 2025. Soundhound is seeing strong growth, particularly in voice commerce and Agentic AI, but its volatility remains a concern. Tempest AI, though facing skepticism, is rapidly growing in healthcare, with potential if its AI-driven drug development proves successful. Big Bear AI struggles with weak fundamentals but is riding a bullish chart pattern, attracting speculative interest. The presenter concludes by acknowledging the speculative nature of these stocks, urging viewers to stay informed.

Takeaways

• 😀 Sound AI's stock saw a huge increase in 2024 but experienced a significant drop earlier in 2025. A strong Q2 2025 earnings report has sparked a recovery.
• 😀 Revenue for Sound AI surged by 217% year-over-year, with a 47% increase from Q1 to Q2 2025, partly due to the acquisition of Amelia.
• 😀 Sound AI is focusing on Agentic AI and voice commerce, with its platform enabling users to make purchases by simply speaking to AI.
• 😀 Sound AI's stock is now above the 40-week EMA and could rise past $15, with a target of $20 if it forms a cup-and-handle pattern before Q3 earnings.
• 😀 Tempest AI has been underperforming after initial hype driven by Nancy Pelosi’s options bets, despite reporting good earnings recently.
• 😀 Wall Street remains skeptical of Tempest AI, seeing it as another medical diagnostics company, but its rapid revenue growth could change perceptions.
• 😀 If Tempest AI continues to grow, it could become a leader in healthcare AI, particularly in developing groundbreaking drugs using its AI platform.
• 😀 Tempest AI’s stock is currently consolidating, but if the company delivers strong results next quarter, it could break the $80 mark and test $90 highs.
• 😀 Big Bear AI faces significant challenges, including poor fundamentals, lack of profitability, and high debt, making it a speculative stock.
• 😀 Despite weak fundamentals, Big Bear AI's chart shows a bullish cup-and-handle pattern, which could trigger a breakout if the company posts strong earnings.
• 😀 Speculation around Big Bear AI’s potential government contracts and insider buying might fuel short-term optimism, but it remains a risky bet without solid fundamentals.

Q & A

What is the current performance trend of Soundhound AI's stock?

Soundhound AI's stock saw a significant rise last year but faced a crash earlier this year. However, it made a strong comeback after releasing a solid Q2 2025 earnings report, with a 217% year-over-year revenue increase and a 47% increase from Q1 to Q2.

What are the key areas where Soundhound AI has a first-mover advantage?

Soundhound AI has a first-mover advantage in Agentic AI, which involves autonomous AI agents performing tasks like making bookings, and in voice commerce, where users can make purchases through voice AI interfaces.

What are some of the risks associated with Soundhound AI's stock performance?

The risks include the potential for sudden crashes due to the high volatility of the stock. Despite strong earnings, Soundhound AI is in a highly competitive market, and the stock could experience setbacks if the broader market faces a downturn.

Why has Tempest AI underperformed this year despite a good earnings report?

Tempest AI's stock has underperformed mainly because Wall Street does not fully believe in its story, viewing it as just another medical diagnostics company. This skepticism continues despite the company's rapid revenue growth.

What does Tempest AI need to demonstrate to change Wall Street's perspective?

Tempest AI needs to show that it can develop groundbreaking drugs using its AI data platform. This would prove its potential as a leader in the healthcare AI sector and could shift Wall Street's perspective.

What trend is being monitored for Tempest AI's stock, and why?

The trend being monitored for Tempest AI's stock is the support of a trendline drawn on the chart. Any dips below this line would indicate weakness, while a continued rise could suggest a potential breakout to test higher price levels.

What is the main criticism of Big Bear AI in terms of its fundamentals?

Big Bear AI is criticized for its weak fundamentals, including minimal revenue growth, no profitability, and high debt. It is also compared unfavorably to Palantir, which is seen as a more successful and established company in the sector.

What technical indicator is being used to assess Big Bear AI's stock performance?

The key technical indicator being used for Big Bear AI's stock is the cup-and-handle candlestick pattern, which is a bullish sign if it successfully breaks out of its current pattern.

What is speculated to be driving interest in Big Bear AI's stock?

Interest in Big Bear AI's stock may be driven by speculators anticipating a rally, insiders buying in advance of potential contract wins, and hopes for government contracts, despite the lack of strong fundamentals.

What potential outcomes are being considered for Big Bear AI's stock price in the near future?

Big Bear AI's stock could either break out of its handle and rally if solid earnings or news of contract wins surface, or it could crash if the rally is unsupported by strong fundamentals, leading investors to move their money elsewhere.