The AI market is projected to grow at nearly 20% annually through 2034. Investors are encouraged to consider Arm Holdings, SoundHound AI, and BigBear.ai as these stocks are currently trading at discounts. Each company offers unique opportunities in the rapidly increasing AI landscape, but caution and thorough analysis are advised.
Artificial intelligence (AI) is growing at breakneck speed, with market projections suggesting a nearly 20% annual growth rate through 2034 according to Precedence Research. This rapid expansion creates ripe opportunities for investors. So, if you have a little cash to put to work, three AI stocks stand out, especially since they’re available at attractive valuations right now.
First up, we have Arm Holdings (NASDAQ: ARM). This company doesn’t actually produce chips—what it does is design them. Then, it licenses these designs to semiconductor firms that handle the manufacturing. Chances are, you’re already using devices powered by Arm’s chip designs without even knowing it. With a solid track record of approximately $4 billion in annual high-margin revenue, Arm is no small player.
The real kicker, though, is how Arm has built its chip designs to be super power-efficient. As AI becomes mainstream, power consumption in data centers is skyrocketing—Goldman Sachs estimates a whopping 165% increase in power use by 2030. Arm’s chips, like Amazon’s Graviton processor, use 60% less electricity than their counterparts, giving it a competitive edge in this growing market.
Next on the list is SoundHound AI (NASDAQ: SOUN). The concept of voice-based tech has had its hits and misses, with automated systems often falling short of user expectations. Take McDonald’s, for instance, which halted its use of IBM’s automated ordering tech after lackluster results. However, SoundHound is reinventing that wheel.
Their Houndify platform offers cutting-edge voice communications that go beyond just recognizing speech to actually understanding it. Automakers are starting to integrate SoundHound’s technology, and its revenue jumped a staggering 151% in the first quarter alone compared to last year. With voice-based AI expected to boom by 35% annually through 2034, SoundHound is in a prime position to benefit.
Last but definitely not least is BigBear.ai (NYSE: BBAI). Unlike giants such as Palantir Technologies, which has garnered attention for its government contracts, BigBear is laser-focused on the private sector. Targeting industries like manufacturing and healthcare, BigBear’s AI solutions help businesses optimize operations and cut costs.
Though BigBear is not profitable yet and is smaller in size, it represents a significant opportunity for investors willing to take on some risk. Analysts project a target price of $6.63, nearly double its current trading price. It’s a volatile pick but could result in decent gains if you’re patient.
As always, when considering investments, it’s wise to do your homework. While Arm Holdings, SoundHound, and BigBear.ai appear to have promising futures in the AI landscape, the market’s volatility and uncertainties can pose risks. Make informed decisions, and keep an eye on developments in this fast-evolving space.
Investors should also consider diversifying their portfolios. The Motley Fool recently highlighted their picks for the top ten stocks, which may provide a better balanced option for all your investing needs.
In summary, the AI market is booming, and stocks like Arm Holdings, SoundHound, and BigBear.ai represent emerging opportunities. While they’re currently undervalued, the companies are positioned well to benefit from the growing demand for AI technology. It’s an exciting, if risky, time to delve into AI investments, but always proceed with caution and informed decision-making.
In conclusion, investing in artificial intelligence right now could prove fruitful, especially with stocks like Arm Holdings, SoundHound AI, and BigBear.ai available at attractive prices. These companies are well positioned in a growing market, directly benefiting from the increasing demand for AI technologies. However, due diligence is necessary as the investment landscape can be unpredictable and may involve risks. Stay informed, and consider a diversified portfolio to navigate market volatility effectively.
Original Source: www.nasdaq.com
