Artificial intelligence (AI) technology has made significant strides in recent years, but many businesses are still harnessing its potential. According to Precedence Research, the overall AI market is expected to grow at a rapid pace of nearly 20% annually through 2034.
To capitalize on this growth, investors should consider three AI stocks that are trading at a discount. Here are our top picks:
1. Arm Holdings (NASDAQ: ARM)
As a semiconductor company, Arm designs chips and chip components, licensing them to other companies for use in various applications. This includes smartphones, computers, and consumer electronics. With high-margin revenue of $4 billion per year, Arm is well-positioned to benefit from the increasing demand for AI-powered devices.
One key advantage of Arm’s chip designs is their power efficiency. Amazon’s Graviton processor uses 60% less electricity than comparable chips, while Google’s Axion chip requires 60% less power. This competitive edge could drive growth in revenue, despite uncertain macroeconomic conditions.
2. SoundHound AI (NASDAQ: SOUN)
SoundHound AI is a leader in voice-driven AI technology, with a proprietary platform called Houndify that has been developing since 2015. The company’s technology has been adopted by several automakers and credit card companies, including Mastercard, which offers automated voice-ordering solutions at quick-service restaurants.
Market research suggests that the worldwide voice-based AI agent market will expand at an average annualized pace of nearly 35% through 2034. SoundHound AI is well-positioned to capture this growth, with its first-quarter revenue increasing by 151% year over year.
3. BigBear.ai (NYSE: BBAI)
BigBear.ai offers decision-making software for businesses, focusing on industries such as manufacturing, industrial warehouses, healthcare providers, and biopharma companies. While it may appear similar to Palantir Technologies, a larger player in the AI platform business, BigBear.ai has distinct advantages in its focus on private sector clients.
The company’s revenue growth prospects are promising, with Precedence Research forecasting an average annual pace of 16% for the decision-making piece of the artificial intelligence industry through 2034. However, investors should be aware that BigBear.ai is not yet profitable and lacks scale, which may contribute to volatility in its stock price.
Overall, these three AI stocks offer strong growth potential and could benefit from the increasing demand for AI-powered solutions. As with any investment, it’s essential to conduct thorough research and consider individual risk factors before making a decision.
Source: https://www.fool.com/investing/2025/05/17/3-no-brainer-artificial-intelligence-stocks-to-buy