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2 Artificial Intelligence (AI) Stocks I'm Buying If the Market Crashes
NVDANvidia(NVDA) The Motley Fool·2025-05-17 17:23

Group 1: AI Market Overview - The current market for high-growth AI stocks is experiencing inflated prices, prompting a cautious approach for potential investors [1][2] - A market correction is anticipated, with a focus on acquiring AI stocks at lower prices during a potential downturn [2] Group 2: Nvidia Analysis - Nvidia has transitioned from a gaming hardware specialist to a leading provider of AI accelerator equipment, significantly benefiting from the AI boom [3][4] - The company's stock price surged over 800% since the onset of the ChatGPT era, with annual revenues quadrupling and free cash flows increasing by 1,380% [4] - Despite a recent 10% drop from all-time highs, Nvidia's stock remains highly valued, trading at 25 times trailing sales and 54 times free cash flows [5][7] - Competition from Advanced Micro Devices (AMD) and major AI service providers like Alphabet and Amazon poses a threat to Nvidia's market dominance [8][9] - A price correction of 20% to 30% is suggested as a more favorable entry point for Nvidia stock [10] Group 3: SoundHound AI Analysis - SoundHound AI is currently unprofitable and trades at 44 times sales, indicating a high valuation compared to its peers [11] - The company reported a 151% revenue increase year-over-year, with expectations to reach approximately 167millioninsalesfor2025[12]SoundHoundAIhasestablishedpartnershipswithnotableclients,includingStellantisandChipotle,andisexpandingitsvoicedrivenservicesglobally[13][14]Despiteitspotential,thestockpricereflectssignificantrisks,especiallywithcompetitionfromlargertechcompanies[15]Thestockhasdecreasedby20167 million in sales for 2025 [12] - SoundHound AI has established partnerships with notable clients, including Stellantis and Chipotle, and is expanding its voice-driven services globally [13][14] - Despite its potential, the stock price reflects significant risks, especially with competition from larger tech companies [15] - The stock has decreased by 20% since January but remains above the target price of 7, indicating a cautious stance on further investments until a more favorable price is reached [16]