[ad_1]
In 2023, artificial intelligence (AI) has taken off, and the stock market has jumped on board.High-tech oriented Nasdaq Composite Last year, it surged 43%, leading the way. Stocks focused on advances in generative AI have had the most notable gains, and this trend looks likely to continue into 2024.
Accelerating the adoption of generative AI promises significant productivity gains. These algorithms can increase employee productivity by automating certain processes. Its uses include generating updates from meetings, creating slide shows from existing documents, drafting email summaries and responses, and writing and debugging computer code.
No one knows how lucrative AI will ultimately be, but the estimates are impressive.prediction from morgan stanley and goldman sachs By the end of this decade, they estimate the economic impact to be $6 trillion and $7 trillion, respectively.
With this in mind, here are two stocks investors should consider buying before they soar 101% and 182% (or more) next year, according to selected Wall Street analysts.
1. SoundHound AI: 182% upside potential
Soundhound AI (NASDAQ: SOUN) Although not a household name, it has a long and distinguished history of providing voice and audio AI solutions to its customers.
The company has been at the forefront of voice recognition AI for nearly 20 years. What started as a music recognition and discovery app quickly evolved into the leading speech recognition software used by many business and enterprise customers.
The company is currently focused on the automotive and restaurant industries, and recently expanded its market reach with the acquisition of SYNQ3, making it the largest provider of voice AI services for restaurants. The company uses generative AI to provide restaurants with voice ordering capabilities through drive-thrus, self-service kiosks, and telephone ordering.
For example, in our collaboration with burger chain White Castle, drive-thru orders were processed in less than 60 seconds and the order completion rate was 90%, exceeding staff-based benchmarks. This comes at a time when restaurants are struggling to maintain adequate staffing levels.
In the third quarter, SoundHound AI had revenue of $13.3 million, up 19% year-over-year and 52% sequentially. The company is not yet profitable, but it is making progress, with a loss of $0.09 per share, an improvement from a loss of $0.15 in the year-ago quarter. Add to that a small market cap of just $453 million as of this writing, and while this stock is a bit on the risky side, it’s garnered a lot of Wall Street attention.
Analysts at DA Davidson rate SoundHound AI a Buy and set a price target of $5. This suggests 182% upside potential for investors. Analysts cited the performance of SoundHound’s voice AI platform and said they believe it “sets the standard for performance.” […] in the voice artificial intelligence market” and eventually gained a significant market share.
They’re not alone. Of the five analysts who announced ratings in December, one by one I rated it a buy or strong buy.
Finally, the stock is trading at less than 5x sales and the stock is near record low valuations. Investors should consider the company’s stock as just one part of a balanced portfolio.
2. Nvidia: 101% upside potential
The acceleration in demand for AI solutions over the past year has been incredible. Nvidia (NASDAQ:NVDA) is a symbol of that worldly tailwind.
The company’s graphics processing units (GPUs) are the gold standard for machine learning (an established field of AI), accounting for 95% of the market, according to market intelligence firm CB Insights. The company has used its expertise to usher in the era of generative AI and capture a large portion of that market as well.
Nvidia recently developed the H200 Tensor Core GPU specifically to meet the demands of AI. According to management, the new superchip delivers almost twice the capacity and 2.4 times the bandwidth compared to the previous generation of his A100.
With consecutive quarters of triple-digit year-over-year growth, the company is showing no signs of slowing down. Nvidia expects revenue to rise 231% to a record $20 billion in the fourth quarter of fiscal 2024 due to accelerated AI adoption.
As a result, the stock price soared 239% in 2023, but Rosenblatt analyst Hans Mosesmann thinks there is room for further gains going forward. He maintains a Buy rating on the stock, with a high price target of $1,100, suggesting the stock could rise 101% from here. Mosesman said NVIDIA’s accomplishments are “completely unprecedented and we’re just getting started.”
He went further and suggested that his peers are underestimating the need for data center modernization. Data center modernization will require the latest and greatest chips to handle the demanding demands of using AI in the cloud. Mosesman estimates the installed base of data centers at $1 trillion, resulting in an unprecedented upgrade cycle. Nvidia is the leading provider of GPUs powering data centers, with an estimated 95% of the market.
Mosesman is not alone. Of the 53 analysts who rated Nvidia in December, 51 rated the company a “buy” or “strong buy,” and none recommended it as a sell.
The stock trades at a very reasonable price-to-earnings (PEG) ratio of less than 1 compared to more than 2. S&P500. By any measure that takes into account its impressive growth, the company is one of the cheapest high-growth AI stocks.
Generative AI is still in its infancy, which suggests a long and profitable road ahead for Nvidia.
Should you invest $1,000 in SoundHound AI right now?
Before buying SoundHound AI stock, consider the following:
of Motley Fool Stock Advisor Our analyst team has identified what they believe Best 10 stocks Things investors can buy right now…and SoundHound AI wasn’t among them. These 10 stocks have the potential to generate impressive returns over the next few years.
stock advisor provides investors with an easy-to-understand blueprint for success, including guidance on portfolio construction, regular updates from analysts, and two new stocks each month.of stock advisor Since 2002, the service has more than tripled S&P 500 returns*.
See 10 stocks
*Stock Advisor will return as of January 8, 2024
Danny Vena holds a position at Nvidia. The Motley Fool has positions in and recommends Goldman Sachs Group and Nvidia. The Motley Fool has a disclosure policy.
2 amazing artificial intelligence (AI) growth stocks to buy before they rise 101% and 182% in 2024, according to 2 Wall Street analysts
[ad_2]
Source link
