Every decade seems to create a new wave of growth stocks that benefit from the latest economic trends. The last 20 years have created considerable wealth for investors who jumped on the growth of e-commerce early (Amazon), streaming video (Netflix) and electric cars (Tesla). Artificial Intelligence (AI) has the makings of the next wealth-building opportunity in the stock market.
The AI market is expected to grow from $184 billion in 2024 to $826 billion by 2030, according to Statista. Here are two stocks that many investors might have liked to buy in 20 years.
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AI-based voice assistants are starting to be widely adopted for areas like customer service and smart controls, but they could create many new use cases in electric cars and other markets over the course of time. the next decade. AI SoundHound (NASDAQ: SOUN) has established itself as the leader in this market. It is a relatively small company that is growing rapidly.
SoundHound has $67 million in revenue, providing the foundation for explosive returns in the coming years as more companies adopt its technology. Its third-quarter revenue was up 89% year-on-year, partly boosted by the recent Amelia acquisition, but it was already seeing strong growth before that, with revenue up 54% year-on-year. one year in the second trimester.
SoundHound is expanding its customer base beyond automotive and restaurants, which have been its focus, to other markets like retail, healthcare and banking. This will significantly expand its addressable market and help the company scale to improve margins. Last year, SoundHound’s top five customers accounted for more than 90% of the business, but now account for less than a third.
Another encouraging sign regarding SoundHound’s growth prospects is the list of partnerships with other major tech companies. NvidiaSamsung, OracleAnd ServiceNow are among the companies working with the leader in AI voice.
SoundHound AI’s main downside is lack of profitability, but that’s 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 constitutes a catalyst for the share price. Investors have the opportunity to get in early before Wall Street picks up on this emerging growth story and drives up the stock price.
Advanced micro-devices (NASDAQ:AMD) shares have tripled over the past five years as they gained market share over Intel. AMD is a leading provider of central processing units (CPUs), graphics processing units (GPUs), systems on a chip (SoCs), and other products serving a variety of markets. However, growing demand for its data center GPUs continues to show why the stock can generate exceptional returns.