3 top AI stocks poised to boom

Artificial intelligence (AI) has the potential to become one of the biggest revolutionary advancements in technology the world has ever seen. Companies are just starting to embrace the technology and what it can do. However, early results are very promising, allowing organizations to become more efficient and better serve their customers.

But make no mistake, artificial intelligence is still in its early days, and there are plenty of opportunities for investors to profit from companies helping move forward with AI. Let's take a look at some of the best stocks to play the AI ​​bull run.


At present no company is benefiting much from AI NVIDIA (NASDAQ:NVDA), Manufacturers of graphics processing units (GPUs) have become the backbone of the infrastructure needed to power AI applications in data centers. GPU chips are able to perform technical calculations faster and with less energy than central processing units (CPUs), making them ideal for use in AI training and inference.

Meanwhile, Nvidia's GPUs have become the industry's gold standard due to its CUDA software platform, which allows its chips to be programmed directly, saving customers time and money.

Nvidia will continue to be the leading company to build the more powerful data centers needed to power AI applications. Meanwhile, Nvidia is not a one-trick pony company, and its networking business is also benefiting greatly from AI.

Nvidia has been experiencing incredible growth, including more than tripling its revenue during its most recent quarter. Despite this, the stock is attractively valued at only 36 Forward P/E, which is poised to rise as the business grows and investors drive up the stock price.

NVDA PE Ratio (Forward) ChartNVDA PE Ratio (Forward) Chart

NVDA PE Ratio (Forward) Chart


When it comes to AI, Amazon (NASDAQ: AMZN) This might not be the first stock that comes to mind. However, the e-commerce giant is investing heavily in technology.

The company owns the largest cloud business, Amazon Web Services, or AWS, which is benefiting from the proliferation of AI. It has also developed two chips, Trainium and Inferentia, specifically used for AI applications.

On the software side, the company has developed platforms to help customers build their own AI models and applications. Its SageMaker platform helps customers build, train, and deploy machine learning models, while its Bedrock platform helps customers build AI applications with high-performance AI from Amazon and other leading AI companies through a single API. Gives the model.

Amazon has also created its own AI-powered assistant, Amazon Q, for software developers. AI assistants can write, test, and debug code. It may also answer questions about company policies, products, and other topics.

Amazon has shown in the past that it's willing to spend big to ultimately win big, and AI is no exception. Trading at a Forward P/E of around 41, the stock has room to run given the AI ​​growth opportunities in front of the company.

AMZN PE Ratio (Forward) ChartAMZN PE Ratio (Forward) Chart

AMZN PE Ratio (Forward) Chart

soundhound ai

shares of soundhound ai (NASDAQ: SOUN) Earlier this year, news broke that Nvidia had invested in an AI-powered voice assistant company. However, recently, the stock has returned to more reasonable levels.

SoundHound's technology helps voice assistants and humans interact more naturally, allowing users to ask more complex questions while getting better answers. The company has made strong inroads in the automobile industry and is also making good progress in the restaurant sector. However, the applications of its technology should extend far beyond these two industry sectors.

The company has an attractive recurring revenue business model under which it receives royalty payments based on the volume, usage or life of the product. For applications where no product is involved, such as with its restaurant offerings, it uses a subscription model.

The letters A and I on top of a colored circuit board.The letters A and I on top of a colored circuit board.

Image Source: Getty Images.

SoundHound is still relatively small, generating just $46 million in revenue last year. However, it has a large booking backlog of $661 million, which if honored would translate into revenue over the next several years. The weighted average length of its contracts is about six and a half years, with the greater revenue backend loaded. Most of the company's backlog comes from its relationships with about 20 auto brands and building its technology into new models of their vehicles.

Trading at more than 21 times forward sales, SoundHound stock isn't cheap. However, its valuation has declined significantly in recent months, and it has great potential for upside if it can continue to transfer its technology to more products. For example, entering smartphones would be a game changer for the company and the stock.

SOUN PS Ratio (Forward) ChartSOUN PS Ratio (Forward) Chart

SOUN PS Ratio (Forward) Chart

Should you invest $1,000 in Nvidia now?

Consider this before buying stock in Nvidia:

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John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of The Motley Fool's board of directors. Jeffrey Seiler has no position in any stocks mentioned. The Motley Fool has positions at Amazon and Nvidia and recommends it. The Motley Fool has a disclosure policy.

3 Top AI Stocks Poised for a Bull Run was originally published by The Motley Fool

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