The AI industry is experiencing significant growth, with predictions of a 20% expansion annually through 2034. Three potential stocks to consider are Arm Holdings for its efficient chips, SoundHound AI for its advanced voice technology, and BigBear.ai for its business-focused solutions, all currently trading at discounted prices.
In the rapidly evolving world of artificial intelligence (AI), the market opportunities are immense and ever-expanding. Precedence Research predicts that the AI market could grow an astounding 20% per year through 2034. Investors looking for the best bets in this field might want to consider three stocks that are currently trading at discounted prices.
First up is Arm Holdings. Often overlooked in discussions about AI profitability, Arm is actually a key player in the AI landscape. The company designs chips and components, which are then licensed to bigger semiconductor firms that take on the manufacturing. If you’re using a smartphone or a sleek laptop, chances are it has an Arm-based chip working behind the scenes. With approximately $4 billion in high-margin revenue ringing in annually, Arm is not just chip design; it’s foundational technology that’s set to thrive, especially amid AI’s massive energy demands.
What’s interesting about Arm is its ability to create power-efficient chips. As we dive deeper into AI tech, power consumption has become a huge thorn in the side for many engineers. By 2030, data centers are predicted to consume 165% more electricity than in 2023, according to Goldman Sachs. Arm’s chips, though, are built with efficiency in mind. Amazon’s Graviton processor, for instance, uses 60% less electricity compared to its competitors. That efficiency is likely to support Arm’s 20% yearly revenue growth trajectory for the next few years.
Next, we have SoundHound AI, the company that’s redefining voice-driven technology. You might remember the clunky voice-command systems of yesteryears; they were somewhat of a disaster. SoundHound aims to change that narrative with its Houndify platform, which has been in development since 2015. It’s not just another tech gimmick; the tech has been embraced by companies ranging from automakers to Mastercard, which utilizes it to streamline ordering for fast-food joints like McDonald’s.
SoundHound’s financial growth is nothing short of remarkable, boasting a staggering 151% year-over-year increase in first-quarter revenue. Market research suggests that the global voice-driven AI segment could see average annual growth of nearly 35% through 2034. With SoundHound poised to capture a big share of this growth, it might just be a tech gem waiting to shine.
Lastly, let’s discuss BigBear.ai. While Palantir Technologies has undeniably taken center stage in the AI-powered decision-making software sector, BigBear quietly focuses on business solutions over governmental contracts. Targeting diverse industries like healthcare and manufacturing, BigBear’s approach aims to help organizations economize and optimize performance—something that’s crucial in business today.
Forecasts indicate that decision-making AI will expand about 16% annually through 2034. However, BigBear.ai isn’t without its challenges. Currently, the company is unprofitable, and its relatively small size might limit some growth prospects. Yet, with a consensus price target of $6.63—almost double its current stock price—investors might be tempted to take a risk.
In summary, the appetite for AI stocks is far from over, with companies like Arm Holdings, SoundHound AI, and BigBear.ai carrying potential for solid returns. Each stock possesses unique attributes that leverage the growing demand for AI technologies, from power efficiency to voice recognition prowess and business solutions. While there are risks involved, the potential upward trajectory of these companies could make them smart buys in an ever-evolving tech landscape.
In a nutshell, potential investors looking for artificial intelligence stocks may find promising opportunities in Arm Holdings, SoundHound AI, and BigBear.ai. Each company brings a distinctive facet to the table, whether it’s Arm’s energy-efficient chips, SoundHound’s strides in voice tech, or BigBear’s targeted solutions for businesses. Despite the inherent risks, these stocks could play significant roles in shaping the future of AI.
Original Source: www.fool.com
