2 Millionaire Maker AI Stocks | all kinds of idiots

Artificial intelligence (AI) stocks are soaring. Even the private markets are going gangbusters. According to a report from Crunchbase, more than a fifth of all venture capital funding is currently invested in AI startups.

Want to participate? Here are two AI stocks that have created a significant number of new millionaires in recent months:

1. NVIDIA: This week is the king of AI

No list of hot AI stocks would be complete without one. nvidia (NVDA -1.99%). Global spending on AI systems and services reached $150 billion in 2023. By some estimates, spending this year is expected to exceed $200 billion. And that’s just the tip of the iceberg. Bloomberg Intelligence believes that generative AI will be a $1.3 trillion industry by 2033.

These AI applications will be powered by semiconductors, and many of them will be needed globally to meet the rapidly growing demand. That’s why Nvidia’s market capitalization has skyrocketed from $200 billion to nearly $2.4 trillion in recent years. The company has a meaningful advantage over its competitors in supplying rapidly growing industries with the materials they need to function.

OpenAI’s ChatGPT was trained using Nvidia A100 processors in 2022, with the next-generation H100 processors manufactured at full capacity for over a year. According to Fool contributor Harsh Chauhan, “This lead puts Nvidia firmly in control of the AI ​​chip market and also explains why its competitors’ latest products aren’t gaining much traction. For example, (advanced micro devices) expects AI GPU sales to reach at least $4 billion by 2024. intel “We are far behind and expect the launch of Gaudi 3 to help us generate $500 million in AI chip sales in the second half of 2024.”

Many investors have already made millions on Nvidia stock, but keep in mind that most of the company’s expected growth is still ahead of it. Although sales have grown rapidly in recent years, Nvidia’s market capitalization growth has far outstripped this revenue growth. And the stock’s price-to-sales ratio has surged nearly three-fold in the past 12 months. Most of the quick money may have already been made with Nvidia stock, but it’s still one of the best investments for long-term AI bullishness.

Data from YCharts.

2. Looking for the next AI hit? SoundHound AI stock could be that.

Are you looking for faster growth than a $2 trillion business can deliver? Take a closer look SoundHound AI (Soun -1.17%).

Founded in 2005, SoundHound is a voice AI and speech recognition company. Think of the product as a voice-assisted version of an automated chatbot. SoundHound allows businesses to provide customers with a “live” representative who can provide personalized guidance and feedback. For now, the software is particularly suited to use cases with a narrow range of common questions. For example, restaurants, one of SoundHound’s largest end markets, can have SoundHound AI agents respond to customer questions such as “Do you take reservations?” or “What time do you open?” SoundHound’s software is expected to see significant adoption in the fast food drive-thru sector.

Like most AI companies, SoundHound’s revenue is small but growing quickly. Last quarter, revenue increased 73% year-over-year to $11.6 million. With a market capitalization of $1.75 billion, the stock is expensive relative to its current sales numbers. But long-term growth could eventually make today’s price tag seem like a bargain. The company has the technology and early market adoption to make that future a reality. Fool contributor Geoffrey Seiler writes, “If the technology becomes an essential feature and is widely adopted across devices and industries, the possibilities are endless, and today’s high valuations will eventually look cheap.”

Even Nvidia is bullish on SoundHound stock. Last quarter, Nvidia made direct investments in several AI startups. SoundHound was one of them, with Nvidia investing $3.7 million for a 0.6% stake. If you’re looking for AI stocks with high upside, SoundHound should be at the top of your watch list.