Artificial intelligence (AI) is already being utilized in multiple applications. From image recognition to healthcare, e-commerce to promoting to credit scoring and lots of other industries – all are making use of AI’s human-like capabilities. And with computing power repeatedly improving, it is ready to get more prevalent over time.
One recent example of its impact is ChatGPT – the AI chatbot developed by OpenAI and launched last November. The tool has quickly caught the general public’s imagination with its ability to perform different tasks resembling write articles, songs and even write code and its success has only highlighted how AI will carry on impacting our lives.
After all, with any fledgling industry, investors will get a chance to purchase in and there are publicly traded firms basing their entire value proposition around AI.
With this in mind, we delved into the TipRanks database and pulled out two AI-focused stocks which have the experts singing their praises. Let’s see what makes them appealing investment selections right away.
SoundHound AI (SOUN)
The primary AI stock we’re is SoundHound AI, a voice assisting specialist. Via speech, its voice AI platform enables consumers to interact with products. This will not be some esoteric segment of the market we’re talking about. The corporate sees an enormous TAM (total addressable market) of $160 billion ahead; by 2024, there are expected to be 8 billion voice assistants in use with 75 billion connected devices operating worldwide the next yr. SoundHound has some big-name clients on its roster resembling Mercedes-Benz, Hyundai, Mercedes-Benz, Kia, Deutsche Telekom, Snap, Stellantis and Vizio.
SoundHound only became a public entity this yr, entering the market via the SPAC route back in April. It has been a trial by fire, to say the least. The shares are down by 88% because the debut as SPACs went seriously out of favor in 2022’s bear.
Nevertheless, despite worries in regards to the company having the ability to withstand the tough macro conditions amidst continued losses, it has been posting some impressive growth. In Q3, revenue climbed by 178% YoY to $11.2 million. The corporate saw a cumulative bookings backlog of $302 million, amounting to a 239% YoY increase – representing a fourth consecutive quarter of triple-digit growth and an organization record.
In November, the corporate introduced a brand new product called Dynamic Interaction, a conversational AI tool that permits businesses to make use of voice AI technology when servicing customers.
Cantor’s Brett Knoblauch thinks it might be a “game-changing technology because it pertains to how humans interact with computers, and more broadly speaking, technology.”
“We consider there are many use-cases that this technology might be utilized for, with low-hanging fruit being inside customer-service settings like restaurants,” the analyst went on so as to add. “We consider this product 1) further expands upon SOUN’s conversational AI advantage; 2) gives us greater visibility into SOUN’s revenue trajectory; 3) will speed up the mix-shift of revenue towards subscription revenue; and 4) expands SOUN’s addressable market.”
Conveying his confidence, Knoblauch rates SOUN as Chubby (i.e., Buy) and backs it up with a $1.60 price goal, implying shares will move ~32% higher over the one-year timeframe. (To look at Knoblauch’s track record, click here)
Knoblauch, while bullish on the stock, is somewhat conservative in comparison with the final Wall Street view here. The common price goal is higher than Alexanders, at $3.70, implying a robust upside potential of ~206% from the $1.21 share price. Unsurprisingly, SOUN has a Strong Buy analyst consensus rating, based on a unanimous 3 Buys. (See SOUN stock forecast)
Perfect Corp (PERF)
The following AI stock we’ll have a look at is Perfect Corp, essentially a SaaS company with a twist. The unique selling point is that it offers augmented reality and artificial solutions to the style and sweetness sectors. So, how does that work?
With the usage of facial 3D modelling and deep learning tech, the company’s AI/AR makeup and hair solutions allow users to try on makeup and different hairstyles and dyes digitally. Principally, AI-powered virtual try-on offerings. In a world where a lot is shifting online and consumers expect engaging experiences catered to their very own style, the corporate is an early mover with a market leading position on this area of interest. Formed in 2015, a number of the world’s most famous cosmetics firms are already on board; Estee Lauder Group, Coty, Kose, LVMH, and Shiseido are all using the solutions.
The corporate has only been on the general public markets because the end of last October when it IPOd via the SPAC route; at the tip of November, Perfect announced unaudited financial results for the nine months of the yr. Driven by an uptick in AR/AI cloud solutions and subscription revenues, total revenue increased by 22.1% year-over-year to $36.2 million, while gross profit rose from $25.6 million in the identical period a yr ago to $31.1 million. Even higher, net income swung dramatically from a net lack of $3.1 million a yr ago to $28.5 million.
For Oppenheimer analyst Brian Schwartz, that’s just one among the explanations that makes Perfect an appealing investment selection.
“The business is a proven disruptor of the sweetness industry, has achieved scale, and is profitably growing at a quick rate,” the 5-star analyst said. “We expect the pedigree, technology vision, strong culture, and industry experience of its CEO and leadership team will set the corporate as much as be a vertical SaaS leader and turn out to be a very good compounding growth investment… The wonder and fashion markets for AI/AR solutions are early in evolution; PERF is arguably the most effective growth asset within the categories for investment.”
Accordingly, Schwartz rates PERF shares an Outperform (i.e., Buy), while his $10 price goal implies 12-month growth of ~25%. (To look at Schwartz’s track record, click here)
Taking a look at the consensus breakdown, 1 Buy and a couple of Holds have been published within the last three months. Consequently, PERF gets a Moderate Buy consensus rating. (See PERF stock forecast)
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Disclaimer: The opinions expressed in this text are solely those of the featured analyst. The content is meant for use for informational purposes only. It is vitally essential to do your individual evaluation before making any investment.