Introduction

Artificial intelligence (AI) has arguably been the biggest trend across markets in 2024. As McKinsey’s ‘State of AI’ report framed it, if 2023 was the year the world discovered generative AI, 2024 was when organizations truly began benefitting from it.

Next year may see AI use cases expand exponentially across all industries. However, with many established AI stocks already topping out, investors could wish to look to companies set to disrupt traditional industries with AI.

The five stocks considered in this article have all stated direct interest in the AI field, but are not necessarily pure-play tech stocks. Instead, they operate within a range of industries, from electric vehicles (EVs) to e-commerce.

The stocks cover a variety of risk profiles, from incumbents to emerging companies yet to achieve profits on a 12-month trailing basis. 

What they have in common is that they all seem poised to make waves with their upcoming product iterations and offerings. Moreover, each has sizeable industry clients already in place.

1. ASML Holding [ASML]

ASML Holding is by far the most established company on this list, with a market cap of $283.12bn as of December 20’s close. 

ASML specialises in photolithography, a process crucial in the production of silicon wafers for semiconductors. Its products therefore underpin the AI industry, and the firm enjoys long-term relationships in the space.

The Dutch firm’s Q3 results, announced October 15, saw ASML’s share price drop 6.42% in a single day of trading. This was in large part due to conservative guidance for 2025, but it is worth noting that the firm has substantially beaten guidance — by between $0.32 and $0.42 per share — every quarter of 2024 so far.

Currently down 6.02% for the year-to-date (YTD), ASML’s share price could offer an exciting entry point if it is able to regain the heady heights seen in July.

2. Recursion Pharmaceuticals [RXRX]

After jumping 57.24% YTD to a year-high close on February 27, Recursion Pharmaceuticals’ share price has been languishing. 

RXRX closed down 38.8% YTD on December 20, but big-name investors, including Cathie Wood, seem willing to bet on a resurgence for the stock. Wood increased her holding in Recursion by 16.4% in Q3.

The clinical-stage biotechnology company uses a range of cutting-edge technology, including AI and robotics, to enhance drug discovery. In a move that generated some excitement, Recursion recently confirmed its acquisition of Exscientia, another biopharmaceutical company leveraging AI. 

With a range of therapies in phase-one trials, focusing on oncology and fibromas, and a handful in preclinical stages of development, Recursion’s product pipeline is robust and could provide upside in 2025.

3. SoundHound AI [SOUN]

SoundHound AI sits in the voice-enabled product AI niche, covering functionalities like text-to-speech (TTS), automatic speech recognition (ASR) and natural language understanding (NLU). 

As AI becomes more integrated into every step of the customer journey, SoundHound’s client list has expanded exponentially since it signed a deal with Hyundai [HYMTF] back in 2017. Now counting names as varied as Deutsche Telekom AG [DTEGY], Nvidia [NVDA] and Mastercard [MA] amongst its partners, SoundHound is also expanding its reach with acquisitions including Synq3 Restaurant Solutions and Amelia, a conversational AI platform.

Up an incredible 925.94% for the year to December 20, the company enjoyed positive Q3 earnings, including record revenues — up 89% year-over-year — and cites its expansion into key new verticals for its forecasts above consensus estimates.

4. QuantumScape [QS]

QuantumScape is developing batteries for EVs that could reach 500 miles in one charge, eclipsing the current 300-350 mile average. Additionally, trials suggest their lifespan could last up to 300,000 miles, again overshadowing the industry standard of 100,000 miles. 

Shortly after the company’s NYSE debut in late 2020, QS soared 1,065.18% to its all-time-high close on December 24. Down 95.62% from that high-water mark, the stock has been choppy for the year-to-date and a series of missed earnings estimates have the majority of analysts rating the stock a ‘hold’. 

That said, in July the company inked a deal with Volkswagen [VWAGY] for licensing batteries to power up to 1 million EVs a year.

5. Rezolve AI [RZLV]

Rezolve AI is a revolutionary engagement platform focused on the mobile commerce industry. Its products centre on natural language interactions and optimizing customer support.

While the company is not yet profitable on a 12-month trailing basis, it maintains 76% gross profit margins and boasts 26% revenue growth over the past 12 months. 

Partnerships with established giants such as Microsoft [MSFT] and Alphabet [GOOGL] might also provide some reassurance to interested investors.

Down 72.52% YTD, perhaps as a result of ‘SPAC fatigue’ (Rezolve began trading on the Nasdaq index in August via a SPAC merger deal), now could be an exciting entry point for the company.

Conclusion

While some analysts are advising caution in an AI investment space that may be approaching overbought status, plenty of disruptive stocks across a range of industries — from EVs to biopharmaceuticals — are leveraging AI to increase innovation, improve outcomes and reduce workload.

Investors who are unenthusiastic about pure-play tech stocks might consider looking to these wider disruptors capitalising on AI technology within their own niches.