Every decade seems to bring a new wave of growth stocks that take advantage of the latest trends in the economy. The past two decades have created enormous wealth for investors who jumped on the e-commerce boom early (Amazon), video streaming (Netflix), and electric cars (Tesla). Artificial intelligence (AI) is all about the next wealth-building opportunity in the stock market.
According to Statista, the AI ​​market is expected to grow from $184 billion in 2024 to $826 billion in 2030. Here are two stocks that many investors might wish they had bought in another twenty years.
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AI-powered voice assistants are starting to gain widespread adoption for things like customer service and smart ordering, but it could create many new use cases in electric cars and other markets over the next decade. SoundHound AI (NASDAQ: SOUND) is emerging as a leader in this market. It is a relatively small company that is experiencing rapid growth.
SoundHound has rolling revenues of $67 million, setting the stage for explosive returns in the coming years as more companies adopt the technology. Third quarter revenue grew 89% year-on-year, partly boosted by the recent Amelia acquisition, but was already reporting high growth before that, with revenue up 54% year-on-year in the second quarter.
SoundHound is expanding its customer base beyond its focus on automotive and restaurants to other markets such as retail, healthcare and banking. This will significantly expand the addressable market and help the company scale to improve margins. Last year, SoundHound’s five largest customers made up more than 90% of revenue, but now represent less than a third.
Another encouraging sign about SoundHound’s growth prospects is its list of partnerships with other leading technology companies. NvidiaSamsung, OracleAnd ServiceNow are among the companies collaborating with the AI ​​Voice Leader.
The main negative against SoundHound AI is a lack of profitability, but this is not unusual for a small tech company. Management expects the company to achieve positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by the end of 2025, which will be a catalyst for the stock price. Investors have the opportunity to get in on the ground floor before Wall Street takes notice of this emerging growth story and bids the stock price higher.
Advanced micro devices (NASDAQ: AMD) Its shares have tripled in the past five years as it gained market share Intel. AMD is a leading provider of central processing units (CPUs), graphics processing units (GPUs), System-on-a-Chip (SoC) and other products for various markets. However, growing demand for its data center GPUs continues to demonstrate why the stock can deliver excellent returns.
