AI has been a dominant theme in the stock markets over the past year. Investors have poured a significant amount of money into leaders in this area, such as Nvidia. Yet even though some stocks have surged to levels that could be seen as overvalued, there are other growth shares that I believe are still worth considering when it comes down to valuations.
Pushing for a profit
The first one is C3.ai (NYSE:AI). It’s a software company that provides AI and machine learning solutions for enterprise businesses, with a particular focus on large-scale, industrial, and government sectors.
Over the past year, the stock is down 14%. Part of this is because the business remains unprofitable, with a high cash burn rate of tens of millions of dollars per quarter. Although this remains a risk going forward, I’m not overly concerned. The business is growing, as shown by the 29% revenue increase in Q2 results versus the same period last year.
Subscription growth (a key metric for the company) rose by 22% versus last year, indicating to me that it’s only a matter of time before the firm flips to making a profit. Recently, it has been shifting from long-term contracts to a usage-based model (consumption-based pricing), aiming to drive broader adoption. I think this is a good move that bodes well for the future.
Let’s not forget that the AI software market is experiencing rapid growth. The business is well-positioned as a first mover in enterprise AI, especially with its focus on regulated and high-complexity industries. Yet due to the losses, I think many investors have overlooked it and I think this has made it undervalued.
The voice of success
Another option that I think is worth considering is SoundHound AI (NASDAQ:SOUN). It specialises in voice AI and natural language understanding, offering conversational AI solutions for everyone from car companies through to smart devices.
It already has some high-level partnerships, such as with Mastercard and Hyundai, but is currently trading around $11. Even though it’s up 164% over the past year, it’s down 44% in 2025. The sharp drop in Q1 came after Nvidia revealed it had fully exited its investment in the business.
Given it was trading above $20 at the start of the year, I think it’s good value at current levels. The exit from Nvidia doesn’t mean the business has peaked, as it has continued to deliver strong financial results since then.
One risk is the high competition, such as with Siri and Alexa from other large tech companies. Yet despite this, there’s growing demand in this niche part of AI. SoundHound is the go-to specialist in this area, which leads me to think that it could stabilise and eventually rally back to the January highs.
I like both AI stocks and think investors can consider them when it comes to trying to find good value in a space where some shares are overhyped.
