2 AI Stocks Down More Than 45% to Buy in March

John Ballard, The Motley Fool

Sun, Mar 9, 2025, 12:13 PM 5 min read

The emergence of artificial quality (AI) exertion offers the committedness of wealth-building returns for investors who clasp the close stocks. Estimates suggest that the productivity gains driven by AI could adhd trillions of dollars to the satellite system implicit the agelong term.

After a large tally implicit the past fewer years, the market's starring AI stocks person pulled backmost somewhat this year. Investors who stay focused connected the semipermanent marketplace trends could instrumentality this correction arsenic an accidental to acceptable themselves up for greater profits down the road. Here are 2 stocks trading good disconnected their highs that are worthy buying now.

SoundHound AI (NASDAQ: SOUN) is simply a person successful dependable adjunct technology, and it's experiencing robust gross growth. However, aft the banal soared successful 2024, it is down 49% twelvemonth to date. Much of that descent took spot aft an SEC filing revealed that AI spot person Nvidia had sold its involvement successful the tiny company. However, a person look astatine the concern indicates that the sell-off was an overreaction that has acceptable up a large buying opportunity.

SoundHound and Nvidia person been moving unneurotic connected AI solutions for vehicles. Their concern was featured astatine CES earlier this year, and SoundHound volition beryllium presenting astatine Nvidia's upcoming GTC 2025, wherever it is expected to amusement demos of its dependable adjunct exertion utilizing generative AI with the Nvidia DRIVE AGX system.

SoundHound's apical enactment astir doubled successful 2024, which partially reflects the further gross that came from its acquisition of Amelia. This acquisition is helping SoundHound grow its addressable marketplace beyond vehicles and restaurants and into the retail, banking, and healthcare sectors. In Q4, SoundHound besides expanded into vigor aft making a woody with 1 of the largest electrical utilities successful the U.S.

Its aboriginal is looking bright. Management indicated during the Q4 net telephone that the institution has a beardown pipeline of caller opportunities, and it continues to absorption connected adding caller capabilities to its products to summation their worth for customers. The institution raised its 2025 gross guidance to a scope of $157 cardinal to $177 million, which would beryllium an summation of 96% astatine the midpoint.

Trading astatine a price-to-sales ratio of 45, the banal looks expensive, but the institution should beryllium capable to turn into its valuation. SoundHound is simply a mid-cap institution with tremendous potential. Its marketplace headdress is $4 cardinal present -- but it could beryllium worthy importantly much successful 10 years.

Tech companies are spending billions to grow their computing infrastructure to grip AI workloads. Statista estimates that the planetary AI server marketplace volition turn from $31 cardinal successful 2023 to $430 cardinal by 2033, and Dell Technologies (NYSE: DELL) is good positioned to benefit. Dell generates the bulk of its gross from selling PCs and related accessories, but 46% comes from its infrastructure solutions group, which includes servers.