The artificial intelligence (AI) boom will create fortunes for savvy investors. Here are two innovative AI leaders that are set to deliver wealth-building returns to their shareholders.
AI stock to buy No. 1: SoundHound AI
SoundHound AI's (NASDAQ:SOUN) state-of-the-art voice technology can interpret speech in a similar manner to the human brain. Its conversational AI provides a faster and more accurate experience than competing platforms -- at a time when companies are rushing to harness the power of this game-changing tech.
Restaurants use SoundHound AI's tools to create custom voice assistants. Its smart answering and ordering solutions eliminate customer wait times by processing multiple orders simultaneously. The tech can also boost profitability by enabling a restaurant to process more orders and reduce labor costs. Customers include Papa John's, Casey's, and Chipotle.
Automotive titans are also racing to adopt SoundHound's technology. The voice AI pioneer's speech recognition software integrates with generative AI models like OpenAI's ChatGPT. It provides access to a vast amount of real-time information like navigation, weather, and maintenance updates conveniently delivered via hands-free controls. Leading automakers, including Mercedes Benz, Stellantis, and Honda, count among SoundHound's growing list of clients.
SoundHound's sales, in turn, are expanding at a torrid clip. The company's revenue jumped by 54% year over year to $13.5 million in the second quarter.
Profitability should come as the small-cap company continues to scale its operations. SoundHound's recent move to acquire enterprise AI software provider Amelia ought to help in this regard. Management expects the deal to boost SoundHound's earnings by the second half of 2025.
AI stock to buy No. 2: Advanced Micro Devices
Nvidia's (NASDAQ:NVDA) AI chips are selling like hotcakes. So much so that the semiconductor designer has struggled to meet the booming demand for this increasingly crucial technology. These shortfalls have kept prices elevated and delayed the AI plans of many companies. Chip buyers clearly want more supply. They're eager to embrace a new competitor to Nvidia -- and Advanced Micro Devices (NASDAQ:AMD) is up to the task.
AMD's data center revenue soared 115% to $2.8 billion in the second quarter. These gains were fueled by strong sales of the company's new AI accelerators, which help to quicken machine learning workloads.
CEO Lisa Su sees revenue for AMD's new AI chips surging to more than $4.5 billion in 2024. Yet the chipmaker is just scratching the surface of its long-term market opportunity. Su predicts that global AI chip sales will grow to a whopping $400 billion by 2027.
AMD could capture 20% of this rapidly expanding market by 2028, according to analysts at Piper Sandler. Large chip buyers, such as Microsoft and Meta Platforms, are reportedly planning to integrate AMD's AI accelerators into their cloud computing operations.
Like SoundHound, AMD is using acquisitions to strengthen its competitive position and accelerate its expansion. The tech leader completed its $665 million purchase of Silo AI on Aug. 12. Europe's largest private AI lab comes with a team of experienced scientists and engineers who will work to bolster AMD's model and software development efforts.
Just days later, AMD struck a deal to acquire ZT Systems for $4.9 billion. The AI infrastructure provider should fortify AMD's ability to design and deploy large-scale cloud computing systems for its customers.
Should you invest $1,000 in Advanced Micro Devices right now?
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Chipotle Mexican Grill, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Casey's General Stores and Stellantis and recommends the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short September 2024 $52 puts on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
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