The Russell 2000 Index is home to many innovative small-cap companies in the U.S., particularly in the technology sector. While some stocks fly under the radar, others have caught Wall Street’s attention due to their strong growth potential and market-moving developments. Among them, SoundHound AI (SOUN) and IonQ (IONQ) stand out as two Russell 2000 tech stocks that analysts and investors are closely watching.
What Is the Russell 2000 Index?
The Russell 2000 Index tracks 2,000 small-cap U.S. companies, serving as a benchmark for the performance of smaller, growth-oriented stocks. It helps measure investor interest in emerging businesses.
Since the start of 2025, market volatility has driven several Russell 2000 stocks to steep discounts relative to their large-cap peers. The iShares Russell 2000 ETF (IWM) and the Vanguard Russell 2000 Index Fund ETF (VTWO), which track the index, are down nearly 7% year-to-date. Meanwhile, SOUN and IONQ have plunged over 50%, potentially creating an attractive entry point for investors.
Let’s take a look into these stocks that offer higher upside potential in 2025, according to analysts.
SoundHound AI
SoundHound AI specializes in voice recognition and natural language processing, offering AI-driven solutions across industries. The company’s shares have experienced significant stock volatility over the past year. After reaching a high of $24.98 in December 2025, the stock saw a sharp reversal, particularly after Nvidia (NVDA) exited its stake. As a result, SOUN stock declined by over 40% in the last 30 days. Most recently, the company delayed its annual report filing with the SEC, citing complexities in accounting for its Synq3 and Amelia Holdings acquisitions.
Having said that, SoundHound’s voice AI technology is gaining traction, with Q4 revenue hitting a record $35 million. The company is expanding into automotive, hospitality, and enterprise sectors, leveraging its advanced speech recognition and natural language processing capabilities. Notably, the growing demand for AI-driven voice solutions positions it for strong market adoption.
On the flip side, its operational loss surged to $257.1 million in Q4 from $12 million a year ago, raising concerns about its path to profitability. Nonetheless, SoundHound continues to expand its partnerships with major global brands. Additionally, its 2024 strategic acquisitions reduced dependence on the automotive sector, which previously accounted for 90% of its revenue, while expanding into new industries for greater diversification.
Is SoundHound a Good Stock to Purchase?
Turning to Wall Street, five-star-rated analyst Gil Luria at D.A. Davidson highlighted SoundHound AI’s strong late 2024 performance, with revenue surpassing expectations. He noted that rising demand has extended SoundHound’s presence into finance, healthcare, and energy, while the Amelia acquisition has expanded its market and diversified its portfolio. Luria has a Buy rating on SOUN stock, forecasting an upside of 33.5%.
Overall, analysts have a Moderate Buy consensus rating on SoundHound stock based on three Buys and two Hold recommendations. The average SOUN stock price target of $15.80 implies a 73.4% upside potential.
IonQ
IonQ develops and provides advanced quantum hardware and cloud-based computing services. IONQ stock has dipped amid doubts about the near-term viability of quantum computing. However, the company is making strategic moves, including advanced talks to acquire ID Quantique for $250 million to strengthen quantum-safe encryption. It has also completed a next-gen ion trap vacuum package prototype, a key step toward more efficient quantum systems.
Following its Q4 results, analysts have maintained a bullish stance on IONQ stock. Morgan Stanley’s five-star-rated analyst Joseph Moore pointed out IonQ’s success in securing AFRL (Air Force Research Lab) contracts, highlighting strong market execution. He further stated that the company’s focus on networking doesn’t signal less confidence in core computing but reflects a large opportunity expected to turn cash flow positive first.
Meanwhile, Benchmark also reiterated its Buy rating on IONQ stock, predicting a solid upside of 119%. Benchmark sees strong growth potential for IonQ, driven by its ID Quantique acquisition and a $500 million capital raise to expand computing and networking. He clarified that while concerns over the CEO transition impacted the stock, management views this move as strategic for long-term growth.
Is IonQ Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on IONQ stock based on four Buys, two Holds, and zero Sells assigned in the last three months. The average IONQ price target of $42.17 implies a 114.71% upside potential.
Conclusion
Despite recent declines, IONQ and SOUN operate in high-growth sectors and hold strong upside potential, according to analysts. With the Russell 2000 index trading at a discount, these stocks could present attractive entry points for investors seeking long-term exposure to innovation.