We recently published a list of Why These 15 Software Stocks Are Skyrocketing So Far in 2025. In this article, we are going to take a look at where Cerence Inc. (NASDAQ:CRNC) stands against other software stocks that are skyrocketing so far in 2025.

Software stocks have been spearheading the stock market’s rally over the past two years and there seems to be no slowing down for the broader software industry. Investors who’ve gotten in early into some of the top software stocks right now have realized multibagger returns, and there’s likely more money to be made as the rally continues.

Of course, I’d be lying if I said I knew which stocks would be the ones to deliver parabolic returns next. That said, you could still find them yourself if you look at the top-performing software stocks so far this year. Many of them are gaining significantly for the right reasons. Some of these top-performing software stocks have a long runway and can mature into much bigger companies down the line.

Methodology

For this article, I screened the top-performing software stocks year-to-date. Stocks that I have covered recently will be excluded from this list.

I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds invest in? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).

A man with an AI powered virtual assistant, demonstrating the coexistence of the two.

Cerence Inc. (NASDAQ:CRNC)

Number of Hedge Fund Holders In Q3 2024: 10

Cerence Inc. (NASDAQ:CRNC) makes AI-powered virtual assistants and conversational AI products for automakers.

The stock is up significantly after it reported a revenue of $50.9 million, which was down 63% year-over-year but exceeded the high end of its guidance. Free cash flow was positive at $7.9 million.

Cerence (NASDAQ:CRNC) reduced operating expenses by $29 million year-over-year through layoffs and office consolidations. In turn, gross margins improved to 65%.

Cerence also secured six new design wins for core products and two generative AI contracts with major automakers and launched CaLLM Edge, the first large language model (LLM) for offline automotive use. It maintains full-year guidance of $236–247 million in revenue and projected $20 million of fixed contracts.

The consensus price target of $8.66 implies 36.95% downside.

CRNC stock is up 75.03% year-to-date.

Overall, CRNC ranks 6th on our list of software stocks that are skyrocketing so far in 2025. While we acknowledge the potential of CRNC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame.If you are looking for an AI stock that is more promising than CRNC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

Disclosure: None. This article is originally published at Insider Monkey.