Artificial Intelligence (AI) is already in use in multiple applications. Industries from image recognition to healthcare, e-commerce, advertising, credit scoring, and many more all rely on AI’s human-like capabilities. And as computing power continues to improve, it’s set to become more prevalent over time.
One recent example of that impact is ChatGPT, an AI chatbot developed by OpenAI and launched last November. The tool quickly captured the public’s imagination with its ability to perform various tasks such as writing articles, songs, and even code. Its success has highlighted how AI will continue to impact our lives.
Of course, in any industry there are acquisition opportunities for investors. AI.
With this in mind, we dug into our TipRanks database and pulled out two AI-focused stocks that experts are praising. See why they’re attractive investment choices right now. Let’s.
Sound Hound AI (Soeun)
The first AI stock we’re looking at is voice-assisted specialist SoundHound AI. The company’s voice AI platform enables consumers to interact with products through voice. This is not the arcane segment of the market we are talking about. The company sees a huge TAM (Total Addressable Market) of $160 billion in the future. By 2024, there will be 8 billion voice assistants in use, and in the next year he is expected to have 75 billion connected devices worldwide. SoundHound’s roster includes high-profile clients such as Mercedes-Benz, Hyundai, Mercedes-Benz, Kia, Deutsche Telekom, Snap, Stellantis and Vizio.
SoundHound was finally unveiled this year and entered the market through the SPAC route in April. It was a fire trial, to say the least. The stock is down 88% since its debut as the bears of 2022 put SPACs seriously out of favor.
Nonetheless, the company has shown impressive growth despite concerns over whether it will be able to withstand a tough macro environment amid continued losses. Revenue for the third quarter was $11.2 million, up 178% year-over-year. The company’s cumulative backlog was $302 million, up 239% year-over-year, marking the fourth consecutive quarter he achieved triple-digit growth and a company record.
In November, the company announced a new product called Dynamic Interaction. It is a conversational AI tool that enables businesses to use voice AI technology when serving their customers.
Cantor’s Brett Knoblauch believes this could be “a game-changing technology as it relates to the way humans interact with computers and, more broadly, technology.”
“We believe there are many use cases where this technology can be leveraged, something that can be easily achieved in customer service settings such as restaurants,” the analyst continued. “We believe this product will 1) further expand the benefits of SOUN’s conversational AI. 2) It will give us a clearer picture of SOUN’s revenue trajectory. 3) Revenue subscription revenue. and 4) expand the market SOUN can serve.”
Knoblauch has an Overweight (or Buy) rating on SOUN, backed by a price target of $1.60, suggesting a 32% gain in the stock over the course of the year. (To see Knoblauch’s achievements, click here)
Knoblauch is bullish on equities, but a bit more conservative than the general Wall Street view here. The average price target is higher than Alexander’s, at $3.70, suggesting a significant upside potential of up to 206% from the stock’s $1.21 price. Unsurprisingly, SOUN has a strong buy analyst consensus rating based on his three unanimous purchases. (look Stock price forecast of SOUN)
Perfect Corporation (PERF)
The next AI stock to watch is Perfect Corp, which is essentially a SaaS company with a twist. A unique selling point is to provide augmented reality and artificial solutions to the fashion and beauty sectors. So how does it work?
Using 3D modeling of the face and deep learning technology, the company’s AI/AR makeup and hair solution allows users to digitally experiment with makeup and different hairstyles and dyes. It is basically a virtual try-on service powered by AI. In a world where more things have moved online and consumers expect engaging experiences tailored to their style, the company is a pioneer with market-leading positions in this niche. It was founded and already has some of the world’s most famous cosmetic companies on board. The Estée Lauder Group, Coty, Kose, LVMH and Shiseido all use this solution.
The company has been on the public market since its SPAC route IPO at the end of October last year. At the end of November, Perfect released his nine-month unaudited financial results. Total revenue increased 22.1% year-on-year to $36.2 million, with gross profit of $31.1 million up from $25.6 million in the same period last year, driven by increased AR/AI cloud solutions and subscription revenue. Even better, net income has changed dramatically from his $3.1 million net loss a year ago to his $28.5 million.
For Oppenheimer analyst Brian Schwartz, that’s just one reason Perfect is an attractive investment.
The five-star analyst said, “This business has proven to be a disruptor in the beauty industry, achieving scale, making profits and growing rapidly.” ) and the leadership team’s pedigree, technology vision, strong culture, and industry experience, we believe the company will become a leader in vertical SaaS and an excellent investment in compounding growth… AI/AR solutions in the beauty and fashion market. Early in its evolution, PERF is arguably the best growth asset in the investment category.”
Therefore, Schwartz rates PERF stock as Outperform (i.e., Buy), but his $10 price target implies a 12-month growth rate of ~25%. (To see Schwartz’s achievements, click here)
Looking at the breakdown of consensus, one buy and two holds have been published in the last three months. As a result, PERF gets a medium buy consensus rating. (look PERF Stock Forecast)
To find good ideas for AI stocks trading at attractive valuations, visit TipRanks. best stocks to buyis a newly released tool that brings together all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are those of the featured analyst only. This content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.