Investors should consider buying two super Artificial Intelligence (AI) stocks hand over fist, as a bull market is predicted to arrive in 2024. The stock market has shown impressive performance in 2023, with the S&P 500 index gaining 28%, and experts believe that stocks could soar even higher next year. Equity research firm Fundstrat predicts a 13% jump in the S&P 500, while investment banks like Deutsche Bank and Bank of America expect the index to reach 5,000 by the end of 2024. With the Nasdaq-100 Technology Sector index already delivering gains of 62% since October last year, it’s time to explore two Nasdaq stocks that have the potential for solid growth in 2024.
One such stock is Advanced Micro Devices (AMD 2.38%), whose shares have already doubled in 2023. The rally is expected to continue in 2024 due to the resurgence in the personal computer (PC) market and the company’s AI chips. Market research firm Canalys estimates an 8% jump in PC shipments next year, a significant improvement over this year’s projected decline of 12%. Two key factors are expected to drive the PC market’s recovery: the Windows refresh cycle and the growth in sales of AI-powered PCs. AMD is poised to benefit greatly from both factors, as it already has AI-powered central processing units (CPUs) on the market. The company’s revenue from the client segment in the third quarter was up 42% year over year, indicating a positive trend that is likely to continue as PC sales rise. Additionally, AMD’s foray into the AI space has been met with great enthusiasm. The company’s recent announcement that major cloud providers, including Microsoft and Meta Platforms, will use its AI chips for training large language models has created a massive opportunity for revenue growth. The estimated addressable market for AMD’s AI chips is projected to reach $45 billion this year and $400 billion by 2027. With anticipated earnings growth of 40% in 2024 and optimistic projections for the company’s stock price, AMD is certainly worth considering.
Another AI stock with projection for significant growth is SoundHound AI (SOUN 0.91%). Analysts expect the stock to skyrocket in 2024, with a median 12-month price target of $5, reflecting a 140% jump from current levels. SoundHound AI is well-positioned to meet or even exceed these growth expectations due to its solid revenue pipeline. The company anticipates a 50% increase in revenue to $46.7 million in 2023, and this growth rate is expected to continue into 2024. SoundHound AI’s platform allows customers to create voice-enabled AI solutions, such as voice assistants and natural language processing. This has led to a significant increase in customer adoption and a bookings backlog of $342 million. Despite underperforming the tech sector in 2023, with a rise of only 16%, SoundHound AI’s current valuation presents an attractive opportunity for investors. Its price-to-sales (P/S) ratio is slightly lower than its 2022 ratio, making it an appealing investment option alongside robust revenue growth.
In conclusion, the bullish outlook for the stock market in 2024 presents an opportunity for investors to consider two AI stocks that have the potential for substantial gains. Advanced Micro Devices (AMD) and SoundHound AI are both poised for success in the coming year, driven by factors such as the resurgence in the PC market, the growth of AI-powered PCs, and a solid revenue pipeline. By capitalizing on these trends, investors may be able to reap the rewards of the anticipated bull market.
