Generative AI Is Exploding: 2 Monster Stocks to Buy Now

Tuesday, Oct 1, 2024 4:51 am ET1min read
The generative AI landscape is booming, with ChatGPT and Gemini leading the way. As demand for intelligent responses and images surges, two stocks stand out as compelling investments: Soundhound AI (NASDAQ: SOUN) and NVIDIA (NASDAQ: NVDA).

Soundhound AI, a conversational voice assistant provider, is poised for growth. Its quarterly revenue more than doubled over the last three years, reaching $13.5 million in Q2 2024. The company's recent acquisition of Amelia, a leading AI software company, opens new industries for expansion, including healthcare, financial services, and retail. Despite uncertainty about profitability, Soundhound's revenue growth and expanding market opportunities make it an attractive investment.

NVIDIA, the leading AI chipmaker, is another monster stock to consider. Its GPUs power generative AI applications worldwide, with a 94% market share in AI server sales. NVIDIA's upcoming Hopper AI GPUs are expected to drive demand, and its software and support services revenue is projected to reach an annual run-rate of nearly $2 billion by the end of 2024. With a forward P/E ratio of 30, NVIDIA offers a relatively affordable entry point into the AI chip market.

Investors should consider these two stocks as they capitalize on the explosive growth of generative AI. Both companies have strong growth prospects and are well-positioned to benefit from the increasing demand for AI-powered chatbots and generative AI copilot assistants.

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