Top Penny stocks for 2024: SoundHound AI, Joby aviation should be on your radar

Penny stocks, as they are called, are not really stocks that trade under $1 per share. The term generally refers to stocks trading below $5 per share.

As any early investor in Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), NVIDIA (NASDAQ: NVDA) or other juggernauts will tell you, when you manage to correctly predict a future Wall Street darling while it’s still a penny stock and keep holding it over the long term, you’ll be happy with the results.

However, for every Apple or Amazon, hundreds or even thousands of penny stocks go nowhere. Then again, many of them “grow up” to be good, solid companies.

Even if they don’t turn out to be the next Amazon, these top penny stocks for 2024 could just become sturdy investments that generate excellent returns for shareholders.

Here are two penny stocks that may not be 10-baggers but could become solid growers in the years to come.  

1. SoundHound AI

As its name suggests, SoundHound AI (NASDAQ: SOUN) provides customers with AI-voice solutions. Its platform has the ability to enable products, services and apps with voice-related capabilities like speech recognition, text to speech, music and content recognition, and other voice features.

SoundHound’s technology is used by restaurants for ordering, in call centers, and in cars, to name a few of its applications. According to the company, its mission is to “voice-enable the world with conversational intelligence.”

SoundHound received a lot of attention earlier this year, when it was revealed that AI powerhouse NVIDIA had invested about $3.6 million in SoundHound stock. The stock promptly surged to almost $9 per share in March.

However, SoundHound shares are now back in penny-stock territory, trading at $4.08 per share. As such, this looks like a good time to maybe kick the tires on this stock, as the company has a few things going for it.

First, SoundHound is one of the leaders in the AI-voice space, and some analysts believe the next wave of AI growth will shift from chipmakers to users. If that happens, it will place the company in prime position.

SoundHound also has a broad range of big customers throughout the tech world, automobile industry, and restaurants, which is another positive. A lot of companies trading in penny-stock territory rely too much on too few big customers.

SoundHound is not yet profitable, but its revenue has been growing rapidly, soaring 73% in the first quarter. The company also revised its annual revenue projections upward to a new range of $65 million to $77 million.

SoundHound has a median price target of $8 per share, which would be a 95% increase over the current price. Even the lowest price-target estimate is $5 per share, a 22% increase, so it’s clear that analysts are bullish on its prospects.

2. Joby aviation

A lot of science-fiction movies from the past suggested we would all be zooming around in flying cars by now. While that hasn’t happened yet, Joby Aviation (NYSE:JOBY) is working on it.

Joby is actually making an all-electric vertical take-off and landing (VTOL) craft that is designed for use as an air taxi, at least initially.

It is very early days for this company, but it has huge potential. Joby has a contract with the U.S. Air Force and a deal to roll out its air taxi in the United Arab Emirates in 2026. Last year, the company completed an exhibition flight from JFK Airport in New York.

Joby has a partnership with Delta Air Lines and plans to launch a commercial air taxi service in New York in 2025, pending FAA approvals. Beyond that, the company hopes to roll its service out to more cities.

Joby has conducted over 1,500 flights spanning more than 33,000 miles with its prototype and recently became the first electric-air-taxi company to have its final airworthiness criteria issued by the FAA.

The company also confirmed that no design changes are required to meet certification requirements. It still has two more phases to complete and is well on its way.  

Joby doesn’t have a lot of revenue, but it is literally just getting off the ground. When this technology eventually rolls out commercially, Joby should be in a great position as a first mover in this space.

Analysts have set an $8 price target for Joby. It is currently trading at about $4.96 per share, so that would be a 61% jump.

Of the two, Joby will probably have a longer runway than SoundHound, as the air-taxi industry is still forming. However, both stocks are worth watching for their potential as leaders in cutting-edge industries.