Unveiled: Two Artificial Intelligence Stocks Capable of Fostering Millionaire Statuses
Artificial Intelligence (AI) shares are surging. Even the private market is performing remarkably well. Currently, over 20% of all venture capital funding is being allocated to AI start-ups, as per a report from Crunchbase.
Wish to join the action? Here are two AI stocks that have recently made numerous new millionaires.
1. Nvidia: The undisputed AI champion
No list of blazing hot AI stocks would be complete without Nvidia (NVDA 2.45%). Global investment in AI systems and services reached $150 billion in 2023. This year, some forecasts predict spending will surpass $200 billion. And that's just the beginning. By 2033, Bloomberg Intelligence predicts that generative AI will grow into a $1.3 trillion industry.
These AI applications will rely on semiconductors, and the world will require a large number of them to satisfy escalating demand. This is why Nvidia's market value increased from $200 billion to almost $2.4 trillion in recent years. The company has a significant advantage over its competitors in supplying this fast-growing industry with the necessary components.
OpenAI's ChatGPT was trained using Nvidia A100 processors in 2022, and its next-gen H100 processors have been in full production for over a year. According to Fool contributor Harsh Chauhan, "This lead has given Nvidia a firm grasp on the AI chip market and also explains why its competitors' latest offerings aren't gaining much traction. For instance, [Advanced Micro Devices] anticipates its AI GPU sales will reach at least $4 billion in 2024. Intel is trailing behind and expects the Gaudi 3 launch to help it generate $500 million in AI chip sales during the second half of 2024."
Many investors have already become millionaires with Nvidia stock, but keep in mind that most of the company's anticipated growth is yet to materialize. While sales have significantly increased in recent years, Nvidia's market value growth has far surpassed this sales growth. And the stock's price-to-sales ratio has skyrocketed - approximately tripling over the past 12 months. Most of the quick profits may have already been made with Nvidia stock, but this still represents a promising investment for long-term AI enthusiasts.
2. Are you searching for the next major AI success story? SoundHound AI stock might be it.
Searching for more rapid growth than a $2 trillion business can probably offer? Spend some time checking out SoundHound AI (SOUN 0.93%).
Established in 2005, SoundHound is a voice AI and speech recognition company. Imagine its products as the voice-enabled equivalent of automated chatbots. With SoundHound, businesses can offer customers a "live" representative capable of providing personalized suggestions and feedback. For now, its software is particularly well-suited for use cases with a limited range of typical questions. Restaurants, for instance - one of SoundHound's major markets - can use a SoundHound AI agent to answer customer queries such as "Do you take reservations?" or "What time do you open?" SoundHound's software could potentially see widespread adoption in fast-food drive-thrus.
Like most AI companies, SoundHound's revenue is modest but rapidly increasing. Last quarter, sales grew by 73% year over year to $11.6 million. With a $1.75 billion market cap, shares are pricey compared to current sales figures. But long-term growth could eventually make today's price tag seem reasonable. The company has the technology and early market adoption to make this future a reality. As Fool contributor Geoffrey Seiler writes, "If its technology becomes indispensable and is widely adopted across devices and industries, then today's high valuation will seem cheap in the future."
Even Nvidia is optimistic about SoundHound stock. Last quarter, Nvidia invested directly in several AI start-ups. SoundHound was one of them, with Nvidia investing $3.7 million for a 0.6% stake. If you're looking for high-potential AI stocks, SoundHound should be at the top of your watchlist.
- If you're interested in diversifying your AI investments, you might want to consider allocating some of your finance into SoundHound AI. With Nvidia showing confidence in the company by investing in it, SoundHound's AI technology and potential for widespread adoption could lead to significant returns.
- For those seeking to invest in the future of finance and technology, SoundHound AI might be an interesting opportunity. The company's focus on voice AI and speech recognition could lead to substantial growth in the money-making prospects of AI, especially in industries like fast-food drive-thrus.
