Michael Burry joins Buffett's Berkshire in scooping up UnitedHealth shares
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Why SoundHound Could Be the Next AI Stock to Rocket
From a penny stock trading at around $2 per share at the start of 2024, SoundHound AI (SOUN) stock has made significant gains, rising 693% to near $16.50 per share. The market typically rewards artificial intelligence companies that can combine rapid growth and innovation with a clear path to profitability. SoundHound checks all three boxes. SoundHound AI just delivered its strongest quarter in company history, and the numbers suggest it may still be one of the most underappreciated growth stories in the mid-cap AI space. SOUN stock is down 17.6% year-to-date, underperforming the S&P 500 Index's ($SPX) gain of 10.2%. Let's dig in. More News from Barchart UnitedHealth Stock Soars as Warren Buffett's Berkshire Hathaway Discloses $1.57B Stake Palantir CEO Alex Karp Sees More Gains Ahead With America-Focused Growth Strategy, Calls U.S. The 'Leader of the Free World' Lucid Motors Is Caught in a Tariff Trap. Is LCID Stock More Likely to Hit $1 or $7 in 2025? Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! SoundHound AI: A Strong Growth Story In the Q2 earnings call, CFO Nitesh Sharan called Voice AI the 'spearhead' of the current generative AI era. The second-quarter numbers suggest that SoundHound's technology, acquisitions, and integration capabilities are giving it a competitive advantage that is starting to translate into strong fundamentals. SoundHound reported $43 million in revenue, up 217% year over year, a rare level of growth in today's market. This growth was not limited to one segment. SoundHound experienced significant growth across automotive AI, enterprise AI customer service, and restaurant AI automation. SoundHound's recent success can be attributed to Polaris, its multimodal, multilingual foundation model for conversational AI, which is the result of 20 years of research and development and data. Management stated that as customers migrate to Polaris, they notice immediate improvements in speed, accuracy, and user experience, resulting in high renewal rates, subscription expansions, and faster deal closures. Many small-cap tech companies have ambitious acquisition plans but fail to integrate and monetize them. However, SoundHound has delivered on its acquisition by encouraging cross-selling solutions between acquired companies and existing customers, as well as replacing legacy technology with in-house Polaris models, lowering costs while increasing performance. In May, SoundHound launched Amelia 7, its agentic AI platform, powered by Polaris. Management stated that 15 large enterprise customers have already migrated to Amelia 7, and initial feedback indicates significant productivity gains. Notably, the company's proprietary technology and acquisition strategy are establishing a competitive advantage that may result in outsized returns for early investors. Although SoundHound is a growing company, it remains unprofitable due to aggressive AI investments and planned acquisitions. Its adjusted net loss came in at $0.03 per share, compared to a loss of $0.04 per share in the year-ago quarter. The adjusted EBITDA loss stood at $14.3 million. Continued cost discipline, combined with investments in generative AI capabilities and market expansion to boost revenue, could help the company be profitable. Management anticipates achieving adjusted EBITDA profitability by year-end 2025. SoundHound AI ended the quarter with $230 million in cash and equivalents and no debt. The company raised its full-year 2025 revenue guidance to a range of $160 million to $178 million, in line with the consensus estimate of $166 million. Analysts expect revenue could further increase by 29.1% in 2026. Currently, SOUN stock trades at 30 times forward sales, which is high but reflects investor confidence in the company's long-term prospects in the voice AI industry. What Are Analysts Saying About SOUN Stock? On Wall Street, SOUN stock is now rated as a 'Strong Buy' compared to a 'Moderate Buy' rating a month ago. Of the seven analysts covering SOUN, five give it a 'Strong Buy' rating, while two suggest a 'Hold.' The stock has surpassed its average price target of $14.29. However, the highest target price of $18 implies potential upside of 12.1% within the next 12 months. Why Should You Eye This AI Stock? While the company acknowledges that deal flow may cause quarterly revenue volatility, its long-term trajectory appears to be stable. SoundHound AI has the first-mover advantage in voice AI solutions. Voice commerce, while still in its early stages, has the potential to be SoundHound's most explosive growth driver in the coming years. Management is striking a balance between aggressive market capture and disciplined spending, which could propel the company to become one of the standout mid-cap AI success stories of the coming years. On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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5 hours ago
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Should You Buy Berkshire Hathaway Stock, Even Though It's Down 10% Since Warren Buffett Announced He's Retiring as CEO?
Key Points Legendary investor Warren Buffett is stepping down as Berkshire Hathaway CEO at the end of 2025. Berkshire is down by 11% since Buffett's surprise announcement. 10 stocks we like better than Berkshire Hathaway › Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) reached an all-time high in early May. Then, Warren Buffett shocked the investing world at Berkshire's annual meeting by announcing his intention to step down from the CEO role at the end of the year. Since his announcement, Berkshire stock is down by about 11%. Is this a justified decline because the "Buffett premium" is going away, or does this represent an opportunity to buy shares at a discount? Here's what you need to know. Not much is changing First of all, Warren Buffett will turn 95 years old on Aug. 30. Is it really that much of a surprise that he isn't going to be running Berkshire for much longer? It just seems far-fetched that the market was pricing in a more than 10% premium on the hopes Buffett would continue to defy the odds and work into his late 90s. And to be honest, I feel that there's value in an orderly succession plan like this, as opposed to expecting Buffett to simply stay at the reins until he can't do it anymore. It's also important to point out that on Jan. 1, 2026, the first day Buffett won't be CEO, not much is going to change from a day-to-day perspective. Berkshire's 60-plus subsidiary businesses largely operate with little or no oversight already. Greg Abel, who will take over as CEO, already oversees all non-insurance operations, and Ajit Jain is Berkshire's insurance head. The biggest immediate changes will be that different people will be in control of the company's stock portfolio, and Abel will have power over Berkshire's $344 billion cash hoard. However, portfolio managers Ted Weschler and Todd Combs have been managing more of Berkshire's investments as the years have progressed. If anything, Berkshire should be worth more now From a business perspective, it's tough to make the argument that Berkshire's intrinsic value is lower than it was on May 1 before Buffett made his announcement. There are three major components of Berkshire Hathaway's business -- the cash stockpile, the operating businesses, and the stock portfolio. First, the cash is about $3 billion lower than it was at the end of the first quarter, but that represents about 0.3% of Berkshire's market value. And in the second quarter earnings report, there was no cause for concern about the operating businesses -- in fact, everything besides insurance underwriting profits (which are lumpy over time) grew nicely. That leaves the stock portfolio. Consider Berkshire's top stock positions and how they've performed in the months since Buffett's announcement: Company (Ticker Symbol) Total Return Since May 1 Apple (NASDAQ: AAPL) 9.9% American Express (NYSE: AXP) 14.2% Bank of America (NYSE: BAC) 18.3% Coca-Cola (NYSE: KO) (0.5%) Chevron (NYSE: CVX) 15.4% Moody's Corp (NYSE: MCO) 15.6% Occidental Petroleum (NYSE: OXY) 10.8% Data source: CNBC. Returns as of 8/13/25. These are all of Berkshire's stock positions with a market value of $10 billion or more and represent nearly three-fourths of the entire stock portfolio. And the average return from this group is positive-12% since Buffett announced his retirement. It's fair to say that since Buffett made his announcement, the stock portfolio has gained tens of billions of dollars in market value. The bottom line To be completely fair, there's an argument to be made against buying Berkshire. For one thing, management didn't buy back any shares in the second quarter, despite the plunge after Buffett's announcement, which could suggest leadership still thinks the stock isn't a compelling value. Plus, Berkshire's operating businesses aren't bad, but they aren't exactly industry standouts in many cases. For example, GEICO recently lost its No. 2 auto insurance market share to Progressive (NYSE: PGR), and Berkshire's management has acknowledged it has fallen behind when it comes to technology. Having said that, Berkshire is still designed to be an incredible long-term compounding machine, and a new person in the CEO office, who has essentially been Buffett's understudy for years, doesn't change that. Berkshire is already one of my largest investments, and has been for some time, but I'm likely to add shares if this price level persists. Should you invest $1,000 in Berkshire Hathaway right now? Before you buy stock in Berkshire Hathaway, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Berkshire Hathaway wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $649,544!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,113,059!* Now, it's worth noting Stock Advisor's total average return is 1,062% — a market-crushing outperformance compared to 185% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 13, 2025 American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Matt Frankel has positions in American Express, Bank of America, and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, Chevron, Moody's, and Progressive. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy. Should You Buy Berkshire Hathaway Stock, Even Though It's Down 10% Since Warren Buffett Announced He's Retiring as CEO? was originally published by The Motley Fool
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5 hours ago
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Is UnitedHealth Group a Buy After Warren Buffett Enters the Picture?
Key Points Warren Buffett's Berkshire Hathaway took a $1.6 billion stake in UnitedHealth Group in Q2 2025, sending shares up over 9% after hours. The stock trades near a decade-low valuation at 12 times earnings after plummeting 46% year to date amid federal probes and surging medical costs. Wall Street analysts remain bullish despite challenges, though price targets vary widely from $198 to $700. 10 stocks we like better than UnitedHealth Group › Warren Buffett just made his most significant healthcare investment in 15 years, and the market is taking notice. Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) revealed a new 5 million share stake in UnitedHealth Group (NYSE: UNH) worth $1.6 billion, according to Thursday's regulatory filing. The insurance giant's stock jumped over 9% in after-hours trading on the news -- a sharp reversal for shares that had cratered 46% year to date before Buffett stepped in. Is the stock now a buy? Let's take a look to find out. The Oracle catches a falling knife This isn't Buffett's first dance with UnitedHealth. Berkshire owned 1.18 million shares between 2006 and 2009 before selling during a broader retreat from health insurers in 2010. His return comes at UnitedHealth's darkest hour: federal investigations into Medicare billing practices, CEO Andrew Witty stepping down in May 2025 for personal reasons (replaced by Stephen Hemsley), and a disastrous Q2 earnings report that sent the stock tumbling 17% in a single day. The company's July guidance cut painted an ugly picture. Full-year 2025 adjusted earnings expectations of at least $16.00 per share fell well short of Wall Street's hopes, while surging medical costs crushed margins at both the insurance and Optum divisions to multiyear lows. Add in the fallout from last year's massive cyberattack that impacted 192.7 million people, and you've got a stock trading at just 12 times forward earnings -- near its lowest valuation in over a decade. But that's exactly when Buffett likes to pounce. The legendary value investor has built his fortune buying quality companies when sentiment hits rock bottom, and UnitedHealth's fundamentals remain intact despite the headlines. Revenue still grew 13% to $111.6 billion in Q2, and the company maintains its dominant position as America's largest private health insurer. Why Wall Street is suddenly bullish Buffett isn't alone in seeing opportunity in the wreckage. Michael Burry of The Big Short fame and David Tepper's Appaloosa Management also took positions last quarter. Wall Street analysts maintain their optimism, with 19 of 23 covering analysts rating the stock a buy, though price targets vary widely -- from a low of $198 to a high of $700, with many recent targets in the $310 to $400 range. The bullish case rests on mean reversion. UnitedHealth's current challenges -- elevated medical costs post-pandemic, regulatory scrutiny, leadership transition -- are arguably temporary headwinds hitting a business with enduring competitive advantages. The company's vertically integrated model, combining insurance (UnitedHealthcare) with healthcare services (Optum), creates a moat that's difficult to replicate. More importantly, the demographic tailwind remains unstoppable. An aging population guarantees growing demand for both Medicare Advantage plans and Optum's pharmacy benefit management services. The company processes 1.7 billion claims annually and serves 53 million Americans through its insurance products. That scale advantage doesn't disappear overnight. Management is already attacking the cost problem, targeting $1 billion in savings by 2026 through AI and technology initiatives. The company's Optum division, which includes pharmacy benefits, care delivery, and data analytics, generated $226 billion in revenue last year -- a business that would rank among the Fortune 50 on its own. With Medicare Advantage margins targeted to recover to 2% to 4% and the company's massive data advantage in underwriting and care management, the path to earnings recovery seems clear, even if the timing remains uncertain. Time to buy? At its current valuation, UnitedHealth assumes the worst-case scenario becomes a permanent reality. That's an assumption Buffett doesn't appear to share, and one that seems overly pessimistic on its face. Savvy investors, in turn, may want to follow the Oracle's lead on this beaten-down healthcare stock. Should you invest $1,000 in UnitedHealth Group right now? Before you buy stock in UnitedHealth Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and UnitedHealth Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $649,544!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,113,059!* Now, it's worth noting Stock Advisor's total average return is 1,062% — a market-crushing outperformance compared to 185% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 13, 2025 George Budwell has positions in Berkshire Hathaway and UnitedHealth Group. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy. Is UnitedHealth Group a Buy After Warren Buffett Enters the Picture? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
