Three AI-focused stocks that could potentially see significant growth over several decades.
With ChatGPT making waves in late 2022, the artificial intelligence (AI) revolution has been on a rollercoaster ride. Early investors in AI infrastructure giants like Nvidia, Microsoft, and Broadcom have already racked up impressive returns. But according to McKinsey & Co., we've only scraped the surface. Their latest research suggests generative AI could add up to a jaw-dropping $4.4 trillion in annual value across 63 use cases, with that number potentially doubling considering AI's broader software integration potential.
As we move into the next frontier of AI, it's time to shift focus from data center construction to the next generation of AI innovators. These companies are pioneering cutting-edge technologies ranging from next-gen audiovisual interfaces to humanoid robotics and self-driving vehicles, backed by massive research and development (R&D) investments.
So, without further ado, let's discover three companies that could be the next AI titans.
Talking Money: The Voice AI Frontier
SoundHound AI (SOUN 3.35%) has carved a niche for itself in the ever-expanding voice AI market. Its technology powers voice experiences in 25 languages for major brands, and its presence in the automotive industry is growing. With over 270 patents (155+ granted, 115+ pending) and a cumulative subscriptions and bookings backlog exceeding $1 billion, SoundHound is the largest independent voice AI platform.
The company's financial trajectory is nothing short of exhilarating. SoundHound's Q3 2024 revenue saw a stunning 100% year-over-year increase to $25.1 million, and management predicts revenue growth exceeding 90% at the midpoint of guidance for 2024. Operating in a stunning $140+ billion total addressable market, SoundHound's leading position as an independent voice AI provider offers a wealth of catalysts for its shares in the years ahead.
Autonomous Delivery: A Robot Revolution
Serve Robotics (SERV 3.98%) is on a mission to solve the elusive profitability crisis in food delivery. While DoorDash has witnessed a 200% revenue surge since 2020, costs have skyrocketed even faster, at 235%. Spun off from Uber in 2021, Serve Robotics has already completed tens of thousands of deliveries in Los Angeles, boasting a 99.94% reliability rate – 10 times better than human drivers.
Serve Robotics has supercharged its growth plans with $86 million in fresh financing, bringing its total 2024 capital raise to a whopping $167 million. With manufacturing partner Magna International producing Serve's third-generation robots and a 2,000-robot contract with Uber Eats set for deployment by the end of 2025, Serve seems poised to capture a substantial slice of the autonomous delivery market, projected to reach a staggering $450 billion by 2030.
High-Performance Computing Power Play
Applied Digital (APLD 0.16%) is seizing the moment in the AI race. Traditional data centers consumed 20 to 100 megawatts in 2020, but today's AI workloads demand an eye-popping 200+ megawatts – with an Nvidia B200 chip now consuming as much electricity as an average American household per day.
Applied Digital's strategic pivot is perfect timing. After securing access to up to 600 megawatts of power capacity in North Dakota (where electricity costs run 24% below the national average), the company raised a massive $450 million through convertible notes and $160 million from investors including Nvidia and Related Companies. With data center power consumption projected to surge 125% by 2030, Applied Digital's early advantage in securing abundant, low-cost energy sets it up to capitalize on the AI computing boom.
The AI Future: Beyond the Giants
While tech titans like Nvidia and Microsoft have dominated the AI narrative up until now, the next chapter might be penned by specialists solving intricate, high-value problems. SoundHound, Serve Robotics, and Applied Digital embody three distinct methods to monetize AI – through voice interfaces, autonomous delivery, and computing infrastructure. With proven technology, meaningful partnerships, and vast addressable markets, these emerging leaders present tantalizing opportunities for investors looking beyond the established AI giants.
As we drift into uncharted AI waters, it's essential to recognize the potential of these companies. SoundHound's dominance in voice AI, Serve Robotics' autonomous delivery revolution, and Applied Digital's high-performance computing play are compelling stories that may just write the next chapter in the AI tale.
In the realm of investing, SoundHound's dominance in the voice AI market and its impressive financial performance, such as a 100% year-over-year revenue increase, makes it an attractive prospect for investors looking to capitalize on the growing voice AI market worth over $140 billion.
For those interested in finance and impactful tech solutions, Serve Robotics' mission to resolve the profitability crisis in food delivery by leveraging autonomous delivery robots and its substantial funding could present a lucrative investment opportunity as the autonomous delivery market is projected to reach $450 billion by 2030.
