Got $3,000? 2 Artificial Intelligence (AI) Stocks to Buy and Hold for the Long Term.

AI Industry Overview - Artificial intelligence (AI) is rapidly expanding across industries, with companies like OpenAI and Nvidia driving significant market growth [1] - AI applications range from tech research (Gartner) to integrated software (Microsoft Copilot) and data center memory suppliers (Micron Technology) [1] - The AI sector offers diverse investment opportunities, though capital allocation requires strategic focus [1] SoundHound AI Analysis - SoundHound AI provides voice recognition conversational intelligence solutions for industries like fast-food (White Castle, Jersey Mikes) and automotive (Stellantis, Honda) [2] - The company improved its financial position from $10M cash and$35M debt in 2022 to $200M cash and zero debt in Q2 2024, though with substantial share dilution [2][3] - SoundHound achieved$13.5M in Q2 sales with 54% YoY growth, projecting revenue to increase from $80M in 2024 to$150M in 2025 [3] - The company trades at 26x sales, which adjusts to 12.5x when accounting for growth projections [3] - Potential growth areas include voice-enabled smart TVs, home devices, carryout ordering, and retail applications [3] Amazon's AI Position - Amazon Web Services (AWS) dominates the cloud market with nearly one-third share, crucial for AI applications [4] - AWS contributed 18% of Amazon's total revenue in Q2 2024, up from 16% in Q2 2023, with a 36% operating margin [4] - Services now account for 58% of Amazon's total sales, including AWS, digital advertising, Prime, and third-party seller services [4] - Amazon's operating profits reached $30B in the first half of 2024, up from$12B in the same period of 2023 [5] - The company is advancing in AI through Amazon Bedrock and custom AI chip development [5] Valuation Comparison - Amazon trades below its historical averages with a PE ratio of 44.86, price to CFO per share of 18.48, and PS ratio of 3.300 [6] - SoundHound represents a higher-risk, higher-reward opportunity compared to Amazon's more stable position [6][7] - Investment allocation should consider risk tolerance, with conservative investors favoring Amazon and aggressive investors potentially weighting SoundHound more heavily [7]