The AI Revolution: 3 Stocks to Watch
The artificial intelligence (AI) landscape has evolved dramatically over the past few years, yet businesses driving this technology have only scratched the surface of its potential. According to Precedence Research, the overall AI market is forecasted to grow at an annualized rate of nearly 20% through 2034. Against this backdrop of rapid growth, here are three artificial intelligence stocks to buy now while they’re trading at a discount.
1. Arm Holdings: The Power-Efficient Chip Designer
Arm Holdings (ARM -1.65%) is often overlooked in discussions about tech companies poised to profit from AI. However, this semiconductor company plays a critical role in AI’s future. Arm designs chips and chip components, licensing them to other manufacturers who may modify them or use them as-is. Their designs are ubiquitous in smartphones and consumer technology, with their chip designs being inherently power-efficient.

As AI becomes mainstream, the power consumption of AI platforms is becoming a significant concern. Goldman Sachs estimates that AI data centers will increase global electricity consumption by 165% by 2030 compared to 2023 levels. Arm’s power-efficient designs position it well for this growing demand. For instance, Amazon’s Arm-based Graviton processor and Google’s Axion chip both use 60% less electricity than comparable processors. With revenue expected to grow at a 20% annual rate for the next three years, Arm is a compelling AI stock.
2. SoundHound AI: Pioneering Voice-Based AI
SoundHound AI (SOUN 0.42%) is making significant strides in voice-based AI interfaces. While early attempts at voice-based interactions were disappointing, SoundHound’s proprietary Houndify platform, developed since 2015, has transformed speech recognition into speech-to-meaning technology. Several automakers and companies like Mastercard are integrating SoundHound’s tech into their solutions.
The global voice-based AI agent market is expected to grow at a 35% annualized pace through 2034, according to Market.us. SoundHound AI is well-positioned to capture this growth, having already reported 151% year-over-year revenue growth in Q1. As consumers become more comfortable with voice-based interactions, SoundHound is poised to benefit.
3. BigBear.ai: AI-Powered Decision Making for Businesses
BigBear.ai (BBAI) is another AI stock worth considering, particularly for its focus on AI-powered decision-making software for businesses. While Palantir Technologies dominates the market, BigBear.ai targets manufacturing, healthcare, and biopharma companies. The decision-making segment of the AI industry is forecasted to grow at a 16% annual rate through 2034.
Although BigBear.ai is not profitable and carries higher risk due to its smaller size and limited analyst coverage, its potential for growth is significant. The current consensus price target of $6.63 is nearly double its current price, presenting a compelling investment opportunity for those willing to tolerate volatility.
In conclusion, Arm Holdings, SoundHound AI, and BigBear.ai offer investors exposure to the rapidly growing AI market. Each company brings unique strengths to the table, from power-efficient chip design to innovative voice-based AI and business-focused decision-making software. As the AI landscape continues to evolve, these stocks are well-positioned for growth.