It's been a stellar year for voice artificial intelligence (AI) company SoundHound AI (SOUN -4.75%), which, as of last week, has soared more than 600% since January. The stock has become one of the more prominent AI stocks to own of late, with its market cap now at more than $5 billion.

The stock rose to popularity this year after investors learned that Nvidia had invested in the business. However, whether or not it can continue rallying next year will likely depend on answers to three crucial questions.

1. Can SoundHound keep its costs down?

SoundHound has been generating some impressive growth this year, but it has been doing that without improving its bottom line. While that may not be a huge problem for growth investors since the business is still in its early stages, it can be a much more important issue as things inevitably slow down.

Over the three-month period ending Sept. 30, SoundHound's sales rose by 89% to $25.1 million. But operating expenses totaled $58.9 million and increased by a much faster rate of 112%. As a result, even with the massive increase in the top line, the company's operating loss more than doubled from $14.5 million a year ago to $33.8 million this past quarter.

Investors may be willing to look past that for now, but if that trend continues, it could weigh on the stock's performance.

2. Can it grow without the help of acquisitions?

This past quarter, SoundHound's growth rate jumped, but that was largely due to the acquisitions of Amelia Holdings and SYNQ3, which significantly expanded and diversified its customer base and revenue. Previously, the company was heavily dependent on the automotive sector, whereas now it generates revenue from many other industries.

The company's year-over-year growth rate looks impressive, but the crucial number for investors to watch is the quarter-over-quarter rate. Although there can be some seasonality affecting the results, that comparison can give investors a potentially better way to gauge how well the business is growing. It's a quicker way of analyzing how the business is growing when factoring in recent acquisitions, especially if SoundHound doesn't break out organic growth (it didn't on its most recent earnings numbers).

If the company isn't able to demonstrate that it can grow organically, that's a potential red flag since it may highlight a lack of strong demand for its core business. In the previous quarter, which ended before the company's acquisition of Amelia closed in August, its year-over-year growth rate was much lighter at 54%.

3. Will SoundHound's cash flow improve?

Cash flow can potentially be a big concern for SoundHound investors in 2025. As the company expands, it may have a greater need for cash. And if the business isn't generating positive cash flow, it may need to resort to issuing stock to raise cash.

That's a problem because more shares on the market results in dilution and puts downward pressure on the stock, potentially leading to a declining share price.

Over the past three quarters, the company has burned through $75.8 million, which is more than the $54.4 million it spent over the same period last year. If the rate of cash burn doesn't drastically improve next year, investors may need to brace for more stock offerings.

The average share count has increased by 49% over the past year to more than 360 million.

Is SoundHound AI a good buy heading into next year?

SoundHound AI stock has been a great investment in 2024. But the business still looks unproven. If acquisitions are propping up its growth numbers, that can paint a misleading picture of just how well the company is doing. And with its losses growing bigger, and more stock offerings potentially on the way next year, investors shouldn't assume that it is going to remain a hot stock in 2025.

Unless the company can address the three issues noted above relating to its profitability, growth, and cash flow, I would steer clear of SoundHound AI. There's still too much uncertainty surrounding the business to make it a good buy right now.