3 Top AI Stocks to Buy in 2025 for $200

Published Date : 07/01/2025 

Explore the potential of investing in Palantir, SoundHound AI, and UiPath as top AI stocks to buy in 2025, even with a modest investment of $200. 

The U.S.

stock market ended 2024 on a high note, with the benchmark S&P 500 index up by 23.3%.

This followed a 24.2% rise in 2023, resulting in a 53.2% gain since 2022, making it one of the best two-year stretches of the 21st century.

Technology stocks, particularly those connected to artificial intelligence (AI), played a significant role in this strong rally.

Despite many high-quality AI stocks reaching sky-high valuations, there are still opportunities for gains.

If you have a little money available to invest, even as little as $200, consider these three AI stocks to strengthen your portfolio over the long term.

Palantir

Palantir Technologies (PLTR) trades at a lofty 65.7 times trailing 12-month sales, yet it remains a top stock to buy in 2025 for several compelling reasons.

The company's expertise in advanced AI technologies and its long-term relationships with government agencies and large enterprises have fueled its exceptional growth.

In the third quarter, Palantir's revenue grew by 30% year-over-year to $729 million, with an impressive operating margin of 38%.

The company also generated free cash flow of $435 million.

One of the key drivers of Palantir's success is the rapid adoption of its Artificial Intelligence Platform (AIP).

This platform expanded the company's customer base by 39% year-over-year to 629, including a 77% increase in commercial customers.

Unlike many competing AI platforms that focus primarily on model development, AIP emphasizes developing ontologies—frameworks that establish relationships between digital assets and real-world applications.

This strategy has enabled Palantir to quickly implement AI solutions in various production environments.

Adding to its appeal, Palantir was recently added to the S&P 500 index, increasing its liquidity and potential for significant appreciation in the coming months.

SoundHound AI

SoundHound AI (SOUN) is a voice AI specialist that offers exciting investment opportunities despite its extremely high price-to-sales (P/S) ratio of 107, which is more than triple its 3-year average.

The stock soared by 836% in 2024, driven by the company's improving operational and financial strength and analysts' upgrades.

In the third quarter, SoundHound's revenue jumped 89% year-over-year to $25.1 million.

Management expects to report revenue in the $82 million to $85 million range for 2024 and has guided for a range of $155 million to $175 million in 2025.

The company also projects converting a bookings backlog worth over $1 billion into revenue within the next six years.

SoundHound has successfully reduced its reliance on a few major customers.

In 2023, one customer contributed 72% of its revenue, but by the third quarter of 2024, that same client accounted for only 12%.

Additionally, its top five customers, which once contributed 90% of revenues, now account for only 33% of the 2024 third-quarter revenue.

The rapid adoption of SoundHound's voice AI and conversational intelligence solutions across industries like restaurants and automotive has reduced customer concentration risk.

SoundHound's proprietary Polaris foundational model, which leverages billions of real conversations and millions of hours of audio across dozens of languages, has improved the accuracy of its offerings and controlled hosting costs.

Polaris currently powers one-third of the company's AI interactions for restaurant clients and could become a strong growth catalyst in the coming years.

However, investors should be aware of the risks, such as the company's elevated valuation and tight cash balance of $136 million relative to its high cash burn rate.

SoundHound reported a net GAAP loss of nearly $92 million in the first three quarters of 2024.

Despite these challenges, astute investors might consider a small stake to benefit from its upside potential while limiting downside risk.

UiPath

UiPath (PATH) holds a 35.8% share in the robotic process automation (RPA) market, positioning it as a dominant player.

The market is expected to grow at a compound annual rate of 39.9% from 2023 through 2030, according to Grand View Research.

UiPath stands to benefit significantly from this growth.

The company has built an extensive partner ecosystem, including technology giants like Amazon, Microsoft, SAP, and Alphabet, which opens up new business expansion opportunities.

UiPath differentiates itself by offering low-code tools for automation across both legacy systems and new applications, helping clients avoid vendor lock-in.

It also provides enterprise-grade governance services to manage automation agents, people, and models.

UiPath is also making strides in the agentic automation space, which involves software agents taking autonomous actions based on insights from large language models, generative AI technologies, and large action models.

The market for agentic labor automation is expected to grow from zero in 2023 to nearly $4.1 billion by 2028, according to IDC.

UiPath's agentic automation offering has already garnered strong customer interest, with over 1,000 organizations signing up for private previews of its agent builder.

Despite a 48% stock crash in 2024, driven by leadership changes and reduced revenue guidance, the rapidly evolving agentic automation opportunity could drive a revival in the share price.

UiPath's recent financial and operational numbers are healthy, with $1.6 billion in cash and zero debt as of the latest quarter.

It posted a 17% year-over-year increase in annual recurring revenue to $1.6 billion and achieved a 97% customer retention rate.

Given these factors, UiPath could be an appealing pick for retail investors looking to capitalize on the AI trend.

Conclusion

Investing in AI stocks like Palantir, SoundHound AI, and UiPath can be a strategic move to strengthen your portfolio, even with a modest investment of $200.

These companies offer unique strengths and growth opportunities that can position them for significant appreciation in the coming years.

Consider the potential risks and benefits of each company to make informed investment decisions. 

Frequently Asked Questions (FAQS):

Q: What is the current market position of Palantir Technologies?

A: Palantir Technologies holds a strong position in the data mining and analytics industry, with a 65.7 times trailing 12-month sales ratio and a significant customer base of 629, including a 77% increase in commercial customers.

Q: How has SoundHound AI performed financially in recent quarters?

A: SoundHound AI's revenue grew by 89% year-over-year to $25.1 million in the third quarter of 2024, and management expects revenue in the $82 million to $85 million range for 2024.

Q: What is UiPath's share in the RPA market?

A: UiPath holds a 35.8% share in the robotic process automation (RPA) market, making it a dominant player in this rapidly growing sector.

Q: What risks should investors consider when investing in SoundHound AI?

A: Investors should be aware of SoundHound AI's high price-to-sales ratio, tight cash balance, and high cash burn rate, which could pose risks to its financial stability.

Q: What is agentic automation, and how is UiPath involved in it?

A: Agentic automation involves software agents taking autonomous actions based on insights from AI technologies. UiPath is a leader in this space, with over 1,000 organizations signing up for private previews of its agent builder. 

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