It’s been almost three years since ChatGPT’s launch put generative AI and other advanced AI technologies on everyone’s radar screens, and we can take a step back now and see what this has brought us.
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That broader perspective shows up clearly in the numbers. According to SkyQuest, the global AI market was valued at just about $200 billion in 2023, jumped to $284.2 billion in 2024, and is projected to reach as high as $373.1 billion by the end of this year. Looking further ahead, the AI market is expected to realize a CAGR of 31.5% from now to 2032, ultimately topping $2.3 trillion.
The forces powering this growth become clearer. The proliferation of smartphones, IoT, social media, and cloud computing is generating enormous amounts of raw data – the lifeblood for AI training models. At the same time, hardware innovations in semiconductor chips, faster processors, GPUs, and even quantum computing are laying the foundation to build and deploy increasingly powerful AI applications.
With the market expanding rapidly and the technological underpinnings strengthening, the key question becomes which companies are best positioned to capture this growth. According to 5-star analyst Gil Luria of D.A. Davidson, Nvidia (NASDAQ:NVDA) and SoundHound AI (NASDAQ:SOUN) stand out as compelling opportunities. These companies present very different profiles, but both, in Luria’s view, offer attractive prospects for growth. Here are the details.
Nvidia
Nvidia, the first AI stock we’ll look at, is a name everyone knows – and for good reason. The company is a high-tech giant and a leader in the semiconductor chip industry, with its GPUs and other high-end processor chips in high demand among a wide range of AI-related companies, from data centers to app builders. Nvidia’s central role in the AI boom has powered NVDA shares to a stratospheric rise, with the stock skyrocketing more than 1,200% over the past 3 years. Those outsized gains have placed Nvidia at the top of Wall Street’s heap with a market cap of $4.33 trillion.
Nvidia has taken this leading role through a combination of sound engineering of high-quality products, and good luck in grabbing the opportunities that followed. The company has long been known for its fast processor chips and has a strong following among gamers and professional graphic designers. When the AI boom hit, Nvidia’s GPUs quickly found a new niche, providing the processing power needed to support AI apps. Over the past several years, Nvidia has been introducing new chip lines to meet the evolving needs of the data center and AI sectors. Just last week, Nvidia unveiled its Rubio CPX chipset, a new GPU that is designed to meet the needs of AI video and software creation.
In Nvidia’s fiscal 2Q26 report, which ended on July 27, the company posted revenue of $46.7 billion, up more than 55% year-over-year and $687 million above estimates. Non-GAAP EPS came in at $1.05, 4 cents better than expected. As in recent years, the data center business was the main growth driver, contributing $41.1 billion of revenue, a 56% year-over-year increase.
Now we can check in with Luria and the D.A. Davidson view of Nvidia. Luria acknowledges the headwinds that Nvidia is facing, in the form of peer-level competition, but goes on to point out that the company has a solid position that should allow it to continue achieving growth.
“We believe the growth in AI compute demand will drive enough demand to sustain NVDA’s growth into next year and likely beyond. While there are still several cross-currents, we believe those are not enough to change that trajectory… While investors are trying to broaden the AI trade, we believe that at 28x CY26 growing earnings ~40%, NVDA may now be the least expensive direct investment in the growth of AI. The contrast has become particularly striking vis-a-vis AAPL, which we are concurrently downgrading to Neutral, trading at the same 28x forward multiple while only growing earnings 9%,” Luria opined.
In line with these comments, Luria upgraded NVDA shares from Neutral to Buy, while raising his price target from $195 to $210, underscoring his confidence in an 18% upside in the coming months. (To watch Luria’s track record, click here)
Overall, Nvidia’s stock gets a Strong Buy consensus rating, based on 39 recent analyst reviews, including 36 Buys, 2 Holds, and 1 Sell. The shares are priced at $177.82 and the $211.11 average price target is slightly higher than Luria’s. (See NVDA stock forecast)
SoundHound AI
The next stock we’ll look at is the Silicon Valley tech firm SoundHound AI. This company, which specializes in bringing AI technology to bear on computerized voice and voice recognition applications, was founded in 2005. In the 20 years since, it has built itself into a $6 billion innovator in AI-powered voice interfaces. The company bases its work on the simple idea that customers and service providers should be able to interact through natural speech.
This simple idea has led SoundHound to develop an array of best-in-class AI voice solutions, particularly in agentic AI. The company’s voice AI products use automatic speech recognition, natural language understanding, and automatic content recognition to deliver clear, accessible voice interfaces. The company has put this on its voice AI platform, Amelia, to provide autonomous agentic AI that is capable of connecting with customers, understanding queries and providing answers, and taking action to address issues.
SoundHound’s voice AI has found applications in a wide range of industries, including customer service, the automotive field, and the Internet of Things. The company’s platform is capable of handling and translating as many as 25 languages, allowing SoundHound’s customers to provide services in their own users’ native tongues. The voice interfaces include Chat AI, Smart Answering, Smart Ordering, and Dynamic Interaction, a set of conversational AI apps that can maintain real-time customer contacts at a high level. SoundHound has a reputation for consistent quality in its generative and agentic AI systems, which give voices to millions of products and services and process billions of annual interactions.
In a move that is expected to increase SoundHound’s ability to further penetrate the agentic AI customer service sector, the company last week announced its acquisition of Interactions. Interactions is known for its pioneering work in AI for customer service and workflow orchestration. The acquisition transaction is valued at $60 million, to be paid in cash plus milestone payments.
The acquisition comes on the heels of strong quarterly results, underscoring the company’s capacity to invest in growth. In 2Q25, SoundHound reported revenue of $42.7 million, up 217% year-over-year and nearly $10 million ahead of forecasts. While the company posted a small net loss of 3 cents per share on a non-GAAP basis, that result was narrower than expected. With $230 million in cash and cash equivalents at the end of June, SoundHound enters the second half of the year well-positioned to support its ambitious expansion plans.
Among the bulls is Gil Luria, who zeroes in on the Interactions acquisition as a key driver of SoundHound’s growth potential.
“We are incrementally positive on SOUN after the acquisition with increased confidence in the company’s ability to capture greater market share in this high-growth opportunity… We view the deal favorably as it extends SoundHound’s market leadership and adds an impressive set of logos for SoundHound to sell into like Citi and other F100 companies per Interactions’ website. This extends SoundHound’s acquisition playbook to drive growth similar to its previous acquisition of Amelia. As a reminder, Amelia had NRR <90% prior to its sale to SoundHound. Since then, SoundHound has driven NRR for Amelia to >120%. We are confident SoundHound will be successful again selling into this new customer set of Interactions,” Luria commented.
Luria goes on to put a Buy rating on SOUN shares, backed up by a $17 price target that suggests a one-year upside potential of 20%.
All in all, SOUN stock has earned a Moderate Buy consensus rating from the Street’s analysts, based on 7 analyst reviews that break down to 5 Buys and 2 Holds. The stock is priced at $14.12, and its $15.33 average price target implies an upside of 8.5% by this time next year. (See SOUN stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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