It seems like every decade brings a new wave of growth stocks that benefit from the latest trends in the economy. Over the past two decades, investors who jumped on the growth of e-commerce (Amazon), streaming video (Netflix), and electric vehicles (Tesla) early have created enormous wealth. Artificial intelligence (AI) brings the next wealth creation opportunity to the stock market.
According to Statista, the AI market is expected to grow from $184 billion in 2024 to $826 billion by 2030. Here are two stocks that many investors may wish they had bought within the next 20 years.
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AI-powered voice assistants are starting to be widely adopted for things like customer service and smart ordering, but the next decade is likely to create many new use cases in electric vehicles and other markets. Soundhound AI (NASDAQ: SOUN) is emerging as a leader in this market. Although we are a relatively small company, we are growing rapidly.
SoundHound’s final revenue was $67 million, laying the foundation for explosive revenue in the coming years as more companies adopt its technology. The company’s third-quarter sales increased 89% year over year, in part due to its recent acquisition of Amelia, but it had already reported strong growth before that, with sales increasing in the second quarter. This was an increase of 54% compared to the same period last year.
SoundHound is in the process of expanding its customer base beyond its traditional focus on automotive and restaurants to other markets such as retail, healthcare and banking. This significantly expands the addressable market and helps the company scale up to improve profit margins. Last year, SoundHound’s top five customers accounted for more than 90% of its business, but now they account for less than a third.
Another encouraging sign about SoundHound’s growth prospects is its list of partnerships with other major technology companies. Nvidia, Samsung, Oracle, and ServiceNow are among the companies working with AI voice readers.
The main negative against SoundHound AI is the lack of profitability, which is not uncommon for small technology companies. Management expects the business to have positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by the end of 2025, which is driving the stock price higher. Investors have an opportunity to get in on the ground floor before Wall Street takes notice of this new growth story and bids the stock higher.
advanced micro device (NASDAQ: AMD) Its stock price has tripled over the past five years as it has gained market share against Intel. AMD is a leading supplier of central processing units (CPUs), graphics processing units (GPUs), systems-on-chips (SoCs), and other products to various markets. However, rising demand for the company’s data center GPUs continues to demonstrate why this stock can deliver outstanding returns.
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