As AI begins to revolutionize nearly everything, the potential $1.8 trillion AI boom could create a new wave of millionaires. Even analysts at Bank of America are excited, noting that AI stocks are on the verge of an “iPhone moment” and could boost the global economy by $15.7 trillion in the next seven years.
“We are at a defining moment, much like the internet in the 90s. Artificial Intelligence (AI) is moving towards mass adoption, and with large language models like ChatGPT, we can finally harness the full power of the data revolution,” the company stated.
ChatGPT, for example, reached one million users in just five days, hit one billion visits in three months, and has been adopted three times faster than TikTok and ten times faster than Instagram. Technology is advancing exponentially.
And this is just the beginning. As AI continues to explode, here are three AI stocks you should consider buying now.
1. SoundHound (SOUN)
- Stock price: $2.05
- Market cap: $417 million
SoundHound (NASDAQ: SOUN) is a conversational AI company with a mission to enable human-like interactions with technology. It is collaborating with the automotive industry to integrate AI-powered voice assistants into vehicles.
Auto manufacturers are a huge market for SoundHound, as 90% of new cars are expected to have voice assistants in the future.
SoundHound’s revenue has been strong. In 2022, the company reported $31.1 million in sales, at the high end of its guidance range. This year, revenue is expected to grow by about 50%.
“Conversational AI is at a watershed moment, and our proprietary dynamic interaction and generative AI solutions are positioned perfectly,” said CEO Keyvan Mohajer. “From electricity to telecommunications to internet search, each generation has established new fundamental capabilities to better serve society, and AI will drive this next frontier.”
2. First Trust Nasdaq AI and Robotics ETF (ROBT)
- Stock price: $40
- Expense ratio: 0.65%
One of the best ways to invest in an emerging sector like AI is through an ETF such as the First Trust Nasdaq AI and Robotics ETF (NASDAQ: ROBT).
This ETF tracks companies that are developing AI, building robots, or providing AI-based services.
Key holdings include:
- C3.ai (NYSE: AI)
- Pegasystems (NASDAQ: PEGA)
- Valeo (OTC: VLEEY)
- ANSYS (NASDAQ: ANSS)
- UiPath (NYSE: PATH)
3. C3.ai (AI)
- Stock price: $21.80
- CEO’s market estimate: AI will become a $600 billion software market
C3.ai (NYSE: AI) CEO Tom Siebel predicts that AI could soon become a $600 billion software market.
“Just as everyone uses PCs, relational databases, and CRM software, soon every enterprise will be using AI applications,” he said. “Generative AI has accelerated interest in AI, and right now, C3.ai is positioned at the center of it all as the largest AI application provider.”
Most impressively, C3.ai generates revenue by providing AI solutions and software to major industry players, including:
- Microsoft (NASDAQ: MSFT)
- Amazon (NASDAQ: AMZN)
- Alphabet (NASDAQ: GOOG, NASDAQ: GOOGL)
In its last quarter, C3.ai reported $66.7 million in revenue, a 4% year-over-year decline. However, this still exceeded its guidance range of $63 million to $65 million, as well as analysts’ expectations of $64.3 million.
The company reported a loss of $15 million, which was better than expected compared to its projected range of $25 million to $29 million.
C3.ai expects to be cash-flow positive and profitable by the end of fiscal year 2024.
Final Thoughts
As AI adoption accelerates, SoundHound, First Trust Nasdaq AI ETF, and C3.ai could see massive growth. These three stocks have the potential to turn investors into millionaires by 2025.
