2 AI Stocks to Consider Purchasing Ahead of the Next Market Shift
Last year, stocks associated with artificial intelligence (AI) surged in value, captivating the attention of investors. However, the first quarter of 2025 saw significant declines in the valuations of several AI growth stocks. If you’re looking to acquire AI stocks at reduced prices, two noteworthy companies stand out as potential investments right now.
An Essential Stock for AI Investors: Nvidia
When considering AI stocks, Nvidia (NVDA -1.51%) should be a top choice. Those already holding Nvidia shares might want to increase their investment. Nvidia is often regarded as a leader in the AI revolution, thanks primarily to its advanced graphics processing units (GPUs), which play a crucial role in developing, training, and executing AI applications.
Nvidia’s GPUs are preferred in the industry due to their superior performance and reliability, even though they come with a premium price tag. Significant early investments by the company’s management have enabled Nvidia to dominate this market segment. Estimates suggest that Nvidia controls at least 90% of the market for data center GPUs, a key component for supporting the AI sector.
Since the start of 2025, the value of Nvidia’s stock has dropped by nearly 20%. Although shares currently trade at 21 times their sales, it’s important to note that this is still a favorable outlook for long-term investors. The AI landscape is just beginning to evolve, and Nvidia’s established lead allows the company to continue investing in future growth. Furthermore, Nvidia’s development platform, CUDA, enhances customer loyalty by allowing customization of their chips, ensuring users remain integrated within Nvidia’s ecosystem.
Nvidia anticipates a sales growth of 57% this year, with an additional 24% forecast for the following year. These growth rates suggest that even at its current valuation, there is potential for long-term investors to see significant returns.
Maximizing Growth with a Smaller AI Business: SoundHound AI
While Nvidia should be a cornerstone of any AI investment portfolio, its size limits exponential growth under the current market dynamics. For those seeking massive upside potential, consider SoundHound AI (SOUN -4.22%). This comparatively smaller AI firm offers promising prospects that could yield returns of 1,000% or more.
Unlike Nvidia, SoundHound is not just a component supplier; it operates primarily as a pure-play AI company. The firm focuses on creating AI-driven services involving sound technology. For example, its solutions can enable fast-food establishments to replace human drive-thru operators with AI systems or allow businesses to implement AI customer support agents. Moreover, SoundHound’s technology is increasingly being integrated into vehicles, facilitating voice interactions for maintenance requests, music selections, and hands-free communications.
Having been in operation for two decades, SoundHound holds multiple patents and has established partnerships with several well-known brands that are testing its technology. In recent quarters, the company has witnessed substantial sales growth, with expectations for the next quarter to exceed 166%, significantly outpacing Nvidia’s growth rate. Although investors may contend with a higher price-to-sales ratio, SoundHound’s market capitalization of approximately $3.5 billion presents a reasonable expectation for continued high growth.
Despite its potential, considerable challenges lie ahead for SoundHound. Tech giants are investing heavily in AI, particularly in the audio technology space where SoundHound specializes. With an annual research and development budget of only $70 million, it remains uncertain whether the company can compete against the massive budgets of larger competitors in the long run. However, for investors willing to navigate this risk, SoundHound represents an exciting opportunity for remarkable growth potential.
