Nvidia continues to be the runaway leader in chips used for artificial intelligence (AI). The company’s leading position in the data center market has driven triple-digit revenue growth over the last few years. Nvidia is now one of the most valuable companies in the world, with a $3.4 trillion market cap at present.
However, with $113 billion in trailing revenue, Nvidia has become a very large business, which will make it more difficult to maintain this level of growth. Nvidia’s top-line growth is already slowing from triple-digit rates, coming in at 94% year over year in the most recent quarter. The stock soared on accelerating growth, but slowing growth could weigh on shareholder returns over the next few years.
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The good news is there are plenty of other opportunities to profit off the AI arms race. If you’re looking for smaller AI companies that can potentially deliver monster returns, here are two to consider buying heading into 2025.
Shares of this AI voice-solutions provider have given investors a wild ride over the last few years, but the stock is surging following another strong quarter of growth. As its latest results show, SoundHound AI (NASDAQ: SOUN) is still a relatively small company going after a big opportunity.
The company’s revenue grew 89% year over year in the third quarter, which was partly boosted by a recent acquisition and expanding market demand for its AI voice solutions. It continued to see double-digit growth from automotive, but it’s also having success diversifying into customer service and retail-banking solutions through its acquisition of Amelia.
While SoundHound’s business is still unprofitable — it reported a loss of $22 million on just $25 million of revenue last quarter — the stock is moving higher because the company is showing that there is, indeed, a large and growing market for its technology. SoundHound’s AI agents are helping reduce the number of calls coming into customer support centers.
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