SoundHound AI (SOUN) is seeing "solid" business momentum driven by artificial intelligence, which is expected to continue next year, Wedbush Securities said in a client note Sunday.

"[SoundHound] is in the early stages of capitalizing on its growth initiatives with enterprise AI demand just starting," Wedbush analysts, including Daniel Ives, said in the note.

The company is working with Nvidia (NVDA) to bring voice generative AI to the edge without cloud connectivity, while its three recent acquisitions are likely to increase its reach to more opportunities for voice AI offerings, the analysts said.

"The company's accretive M&A strategy adds more recurring revenue into its operations while improving bottom-line metrics immediately as [SoundHound] realizes cost synergies to expand the bottom-line while seeing greater opportunities to cross-sell/upsell into a larger customer base," the analysts said.

Wedbush increased its price target on the stock to $22 from $10, with an outperform rating.

"SoundHound represents an underappreciated pure-play AI company that is taking significant strides in taking share across the landscape with its enterprise AI software platform seeing continued strength with its expanding [total addressable market] as the company starts expanding its growth trajectory in 2025," the analysts said.

The company's shares were up 6% in recent trading.

Price: 17.96, Change: +1.05, Percent Change: +6.22