Two AI Software Stocks With Strong Momentum

In partnership with

The AI Investing Pulse

June 26, 2025

In this Week’s Edition:

1. Analysis - Two AI Software Stocks with strong momentum

2. Stock Ideas - 2 AI Stocks to Profit from the AI Boom

3. News - Brace for a pullback, says top investor about Nvidia stock

4. Startups - Legal AI upstart Harvey raises $300 million, rockets to a $5 billion valuation

5. Trends - Bofa sees $155 billion agentic AI boom by 2030

6. Other News - China targets rapid AI expansion to rival US leadership

✨ Two AI Software Stocks with Strong Momentum

In the dynamic landscape of AI investing, identifying companies that combine robust market momentum with strengthening growth and fundamentals is essential. we scan our 170+ AI stocks weekly to find such opportunities, ranking them across growth (revenue and EPS), financial quality, valuation, and, crucially, Relative Strength (RS) — benchmarked against our universe of more than 170 AI stocks.

This week, we look at a small cap and a large cap in the application & edge AI stack that, showing exceptionally strong Relative Strength, indicating significant market interest and price strength. Though their overall scores fall just short of the required threshold to qualify for the weekly watchlist.

🔹 Cerence Inc. $CRNC ( ▲ 0.68% )  

• Industry: Software – Application

• AI Stack: Application & Edge (AI in Automotive, Voice Assistance)

• Market Cap: $407M

• Performance YTD: +20%

• Relative Strength (RS): 97

• Ranking Status: 📈 Momentum

🧠 What the Company Does
Cerence operates at the Application & Edge layer of the AI stack, delivering AI-driven voice assistance for automotive interfaces. Its technology allows seamless, natural language interactions between drivers and their vehicles, making it an integral part of the modern smart mobility experience.

🔍 Why It Stands Out
Cerence (CRNC) ranks among the highest in momentum this week with a Relative Strength (RS) score of 97. This indicates strong investor interest and notable share price strength, placing it near the top of our momentum chart.
Looking at its fundamental profile, Cerence has a Growth Score of 70, reflecting solid performance in revenue and EPS growth, both actual and forecast. Its Financial Quality Score is 45, based on our key metrics. However, its Valuation Score stands at 100, indicating a favourable valuation based on metrics like PEG ratio and DCF.
Despite a strong Valuation Score, Cerence's Total Score is 66.8. This means it falls just shy of the required 70+ threshold for inclusion on the weekly watchlist, even with its exceptional market strength.

📊 Technical View
Technically, Cerence has been trading in a relatively tight range — between $8 and $10.50 over the past two months. This suggests a possible period of consolidation, which may either precede a breakout or continued consolidation.

🔹 Spotify Technology $SPOT ( ▼ 3.53% )  

• Industry: Internet Content & Information

• AI Stack: Application & Edge (AI in Music Recommendations, Personalisation)

• Market Cap: $151B

• Performance YTD: +65%

• Relative Strength (RS): 90

• Ranking Status: 📈 Momentum Candidate

🧠 What the Company Does
Spotify applies AI to enhance personalisation in music and podcast recommendations, using real-time behavioural insights to tailor user experiences. This approach places it firmly within the Application & Edge layer — where AI meets everyday usage.

🔍 Why It Stands Out
Spotify’s (SPOT) Relative Strength (RS) score of 90 highlights notable market strength and price leadership, reflecting strong investor interest and sustained price performance.
When examining its fundamental profile, Spotify has a Growth Score of 70, demonstrating strong performance in revenue and EPS growth, both actual and forecast. Its Financial Quality Score is 75, indicating a solid financial position. However, its Valuation Score stands only at 49 out of 100, suggesting that the stock is becoming relatively expensive compared to peers based on key valuation indicators.
Despite its robust individual Growth and Financial Quality scores, Spotify’s Total Score of 69.2 means it narrowly misses the required 70+ threshold for inclusion on the weekly watchlist. Nonetheless, its strong technical profile and improving fundamentals continue to keep it firmly on our radar. Spotify was previously featured in our May 1 Brief, and has since maintained its strong position, growing over 20%.

📊 Technical View
From a chart perspective, Spotify is currently trading near all-time highs, reinforcing the strength implied by its RS score and signalling continued market enthusiasm.

🔍 Final Take

Cerence and Spotify Technology, with their strong Relative Strength scores and solid growth profiles, remain standout names in the AI investment landscape.

Cerence offers exposure to a focused AI niche within the automotive sector, while Spotify applies AI to enrich digital entertainment on a global scale. These companies illustrate how momentum and growth intersect — a pattern our algorithm is built to surface on a weekly basis.

As always, while these stocks are worth monitoring, it's important to factor in broader macro conditions, including potential market volatility and geopolitical developments. We encourage disciplined research when evaluating any investment opportunity.

_{Disclaimer - This content is provided for informational purposes only and does not constitute investment advice, personal recommendations, or an invitation to engage in any investment activity. The information presented is derived from publicly available sources and should not be solely relied upon for making investment decisions. Always consult with a qualified financial professional before making investment choices. Past performance is not a guide to future performance.}

_{Source: Finbox (S&P Global Intelligence). Total Score: Sales and EPS Growth + Financials + Valuation. RS Score: Relative Strength vs the AI universe of 173 AI stocks. All scores out of 100.}

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TOP AI STOCKS PERFORMANCE

TOP AI ETFs PERFORMANCE

AI STOCKS IDEAS 

2 AI Stocks to Profit from the AI Boom - The Motley Fool

CoreWeave vs Nvidia: Which AI Stock is the Better Investment? - The Globe and Mail

This AI Data Centre Stock Will be Worth More Than Palantir by 2030  - Yahoo Finance

AI STOCKS & ETFs NEWS 

Brace for a pullback, says top investor about Nvidia stock - TipRanks - Nvidia's stock has surged over 900% since January 2023, but a leading investor warns of a potential pullback, indicating short-term corrections may follow such rapid gains.

Microsoft stock hits record high as company focuses on Agentic AI - IBD - Microsoft’s stock reached a record high of $490.11, driven by a strategic shift towards agentic AI and significant investments in infrastructure.

Nuclear power stocks are soaring amid an AI energy push: here are 7 names to watch - MSN -  Nuclear power stocks are rising due to increased demand from AI data centers, with major companies and government initiatives driving investment and growth in the sector.

AI STARTUPS

Legal AI upstart Harvey raises $300 million, rockets to a $5 billion valuation - Maginative - Harvey AI offers AI tools for legal processes, expanding its client base and plans for growth in professional services.

Sweden's Norrsken commits €300m to AI for good startups - Siliconcanals - Norrsken has dedicated €300 million to European startups leveraging AI for societal challenges like climate change and health, amid a global increase in AI investments.

Medical AI startup Abridge closes $300M investment at $5.3B valuation - Siliconangle - The startup specialises in AI-powered medical scribe technology, enhancing documentation efficiency for healthcare providers.

AI TRENDS

Bofa sees $155 billion agentic AI boom by 2030, spotlights Microsoft, Salesforce and others - Benzinga - Bank of America projects that agentic AI spending may reach $155 billion by 2030, driven by adoption across industries.

AI will book your holiday but won’t clean your kitchen yet - IMD - AI is revolutionising travel with automated holiday planning and booking through new start-ups, though it remains ineffective for household chores like cleaning kitchens.

AI and developers: what the future has in store for programmers - Visionarymarkleting - The evolving relationship between AI and developers highlights its dual role as an empowering tool and a potential job threat, emphasizing the necessity for programmers to adapt in an AI-driven landscape.

OTHER

China targets rapid AI expansion to rival US leadership - NewsBytes - China is rapidly enhancing its AI capabilities to compete with US leadership, focusing on self-sufficiency and global dominance through significant investments.

Technology funding divide widens in deeptech - FinancialExpress - India faces a widening funding gap for deeptech startups, particularly in growth capital after initial rounds.

_{Disclaimer - The information contained on this newsletter does not constitute investment advice or a personal recommendation, nor is it an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investments, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all. The information presented is based on publicly available data and sources believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Market conditions can change rapidly, and the information provided may no longer be up to date. This content is for informational purposes only and should not be construed as financial, legal, or tax advice. Data sources: S&P Global Market Intelligence}