Energy shocks, sticky inflation and shifting central bank policies are keeping markets on edge, but they are also creating room for smaller, more focused companies to stand out. While headlines center on mega caps, some early-stage AI names in machine learning, automation and data intelligence are quietly building tools that could reshape how businesses cope with higher costs and supply disruptions. This article highlights 3 stocks from an AI Small Caps screener that targets these kinds of under-the-radar opportunities. It is designed to help you focus on companies where AI sits at the core of their growth story rather than as a side project.

BILL Holdings (BILL)

Overview: BILL Holdings runs a cloud based platform that helps small and midsize businesses handle day to day finance tasks like paying suppliers, collecting invoices, managing expenses, and improving cash flow using automated workflows and AI tools. Its software connects businesses with their customers, suppliers, accountants, and financial institutions, backed by onboarding and ongoing support services.

Operations: BILL generates about US$1.55b in revenue, entirely from its Software & Programming segment.

Market Cap: US$3.64b

Investors looking at AI small caps may find BILL interesting because its AI driven automation sits at the heart of how thousands of businesses manage payments and cash flow, and recent launches like Supplier Payments Plus and partnerships with firms such as Digits and Rillet expand how deeply it is embedded in customers' financial workflows. The company is still loss making and relies on external funding, so execution risk is a consideration, and analysts have published expectations for earnings and valuation using a range of assumptions, including P/S benchmarks and internal fair value estimates. The company has also used share buybacks and has a relatively new leadership and board mix. These factors, and the associated trade offs, may warrant closer attention from investors.

AI driven workflows, fresh leadership and active capital returns make BILL look like a payment backbone that is still being priced as a work in progress. Yet the real tension sits in its 3 key rewards and 1 important warning sign

Freshworks (FRSH)

Overview: Freshworks builds cloud based customer and employee service software that helps companies manage support tickets, live chat, phone support, CRM, marketing and internal IT requests in one place, with AI tools layered on top to automate routine work and speed up responses.

Operations: Freshworks generates about US$838.8m in revenue, entirely from its Software & Programming segment, with sales spread across the United States, Europe, the United Kingdom and the Asia Pacific region.

Market Cap: US$2.24b

Freshworks sits at the crossroads of AI and cloud software, with products like Freshdesk, Freshservice and its AI powered platform helping over 70,000 customers modernize support and IT operations while partners and upmarket wins expand its reach. Investors get a mix of AI adoption, a sizeable announced US$400m buyback program and recent profitability, alongside real questions about earnings volatility, funding risk from external borrowings and whether AI features can be fully monetized when only a fraction of customers currently pay for them. Upcoming product launches, leadership changes and partner expansion could all shift the balance, but to see how these moving parts stack up on growth potential, risks and valuation, you need to look under the hood of the full analysis.

Freshworks has profitability, a sizeable US$400m buyback and AI tools that only a fraction of customers currently pay for, which raises a sharper question that the analyst forecasts for Freshworks quietly answers before it reveals the real catch

SoundHound AI (SOUN)

Overview: SoundHound AI builds independent voice and agentic AI systems that let cars, call centers, devices and restaurants interact with customers through natural, conversational speech, using its Houndify platform, Chat AI assistants and a growing suite of voice powered tools. Its technology underpins everything from in car infotainment and drive thru ordering to customer service automation across the US, Korea, Europe and other markets.

Operations: SoundHound AI generates about US$168.92m in revenue from Internet Software & Services, with most sales coming from the United States and the balance spread across Korea, France, Germany and other regions.

Market Cap: US$2.89b

SoundHound AI provides exposure to voice and agentic AI, with a 20 year history of patents and know how, a three pillar model spanning royalties, subscriptions and voice commerce, and deployments in autos, restaurants and enterprise customer service that are already handling high volumes of real world requests. At the same time, the company remains unprofitable, carries higher risk borrowings, has experienced heavy stock based compensation and dilution, and insiders have recently sold shares. The tension between revenue growth and cash burn is therefore central to the investment debate. A key question is whether its moat and new agentic AI deals are sufficient to offset those funding and profitability risks, and investors who dig deeper may see a more nuanced picture than headlines alone convey.

Voice and agentic AI is gaining real world traction at SoundHound AI, but the funding strain and insider moves are easy to gloss over. The analysis report for SoundHound AI hints at how that trade off really stacks up.

The three stocks here are only a starting point. The full screener surfaced 32 more AI focused small caps with equally compelling narratives that you have not seen yet, all grouped inside the AI Small Caps screener. Use Simply Wall St to identify and analyze the specific catalysts, business models and risk profiles that matter to you so you can focus on the highest conviction AI small cap ideas.

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If SoundHound AI or any of these companies sound like a great opportunity, register for FREE with Simply Wall St and add your top picks to a Watchlist to monitor the share price against the fair value for the ideal entry point. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.