Artificial intelligence (AI) is poised to be the next great technology revolution, similar to e-commerce, video streaming, and electric vehicles in earlier decades. According to Statista, the AI industry will increase from $184 billion in 2024 to $826 billion by 2030. SoundHound AI and Advanced Micro Devices (AMD) are two firms that stand out as long-term growth prospects in this expanding market.
SoundHound AI: A Pioneer of Voice Technology
SoundHound AI (NASDAQ: SOUN) specializes in voice recognition technology for applications such as customer service and smart ordering. As sectors like electric vehicles and retail adopt speech AI, SoundHound is moving into new businesses such as healthcare and finance.
The company’s sales increased by 89% year over year in the third quarter, owing in part to the acquisition of another AI business, Amelia. Even before this, SoundHound’s revenue increased 54% year on year in the second quarter.
SoundHound is broadening its clientele. Previously, its top five customers accounted for more than 90% of revenue; today, they account for less than one-third, decreasing reliance on a few clients. It also has agreements with big technology companies including Nvidia, Samsung, Oracle, and ServiceNow.
Despite its quick expansion, SoundHound has yet to become profitable, as is common for smaller technology businesses. However, the firm intends to be profitable by the end of 2025. This timeframe might position investors to profit from prospective share price increases as the company grows.
Advanced Micro Devices (AMD) is a semiconductor powerhouse.
AMD (NASDAQ: AMD) has been a prominent participant in the semiconductor business, manufacturing CPUs, GPUs, and other critical components for a variety of applications. Recently, their concentration on GPUs for data centers has resulted in considerable revenue growth.
In the third quarter of 2024, AMD’s data center sales increased 122% year on year to $3.5 billion, increasing the company’s overall revenue by 18%. This expansion is mostly owing to its Instinct brand of GPUs, which are critical for training sophisticated AI models.
The AI chip industry is growing quickly. In 2023, AMD predicted that the data center AI chip market will rise from $45 billion to more than $400 billion by 2027. This year, the business increased its projection, estimating that the market for AI accelerators will reach $500 billion by 2028.
AMD’s strong position in GPUs provides it an advantage over long-time rivals such as Intel, which has dominated CPUs for generations. As AI use grows, AMD’s GPUs become more suitable for powering AI technologies, establishing it as a prominent participant in the sector.
Why do these stocks stand out?
Both SoundHound AI and AMD have distinct prospects in the AI arena. SoundHound’s breakthrough speech AI solutions have the potential to transform various sectors, whilst AMD’s cutting-edge CPUs are critical for AI and data center operations. AMD’s stock is down 33% from its high, making it a particularly appealing purchasing opportunity for long-term investors.
These thoughts are excerpted from The Motley Fool, where John Ballard explores these firms’ potential as significant actors in the future of artificial intelligence. Always conduct comprehensive research before investing.
John Ballard’s post “2 AI Stocks to Buy in December and Hold for 20 Years” was published by The Motley Fool on December 7, 2024. You can check out the full article here.
I’m Voss Xolani, and I’m deeply passionate about exploring AI software and tools. From cutting-edge machine learning platforms to powerful automation systems, I’m always on the lookout for the latest innovations that push the boundaries of what AI can do. I love experimenting with new AI tools, discovering how they can improve efficiency and open up new possibilities. With a keen eye for software that’s shaping the future, I’m excited to share with you the tools that are transforming industries and everyday life.