Stocks to buy

The artificial intelligence (AI) game shows no signs of slowing. In fact, we’re still in the early innings. Even Analysts at Bank of America say AI is on the brink of an “iPhone moment” and could boost the global economy by $15.7 trillion. It could also send AI stocks to higher highs.

For just an idea of how powerful the AI trend has become, look at what happened with Microsoft (NASDAQ:MSFT) on Tuesday. The tech giant announced a $30 per month subscription for the use of generative AI with Microsoft 365 — and exploded. In fact, MSFT soared around $14 a share on the day. Since late April, it’s up 29%. Or, look at Nvidia (NASDAQ:NVDA), which ran from about $300 to $475 since May.

Granted, those two stocks alone are still very much worth buying and holding. Both could easily see another $100 of upside this year alone and still create obscene wealth. However, if you’re looking at smaller stocks with the potential to turn $5,000 into $1 million, take a look at these three AI stocks.

AI Stocks: Palantir Technologies (PLTR)

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The last time I mentioned Palantir (NYSE:PLTR), it traded at around $9.50. Today, it’s up to $18.08 and could see higher highs — all thanks to the AI boom.

Helping, Mizuho analyst Matt Broome recently boosted his price target on the PLTR stock to $14 from $8. He also believes the company is “likely well-placed to manage secure AI deployments for its customers,” as noted by MarketWatch.com. Better, in its first quarter earnings release, Chief Executive Officer (CEO) Alex Karp said, “The depth of engagement with and demand for our new Artificial Intelligence Platform is without precedent.”

Better, first-quarter earnings were solid. The company posted revenue of $525 million, up 18% year-over-year. That beat the company’s guidance range and the Street’s estimate for $506 million. Adjusted EPS came in at five cents, or a penny better than expectations. For the second quarter, PLTR sees revenue falling in the range of $528 million and $532 million. It also expects to be GAAP profitable in the second, third, and fourth quarters. With full-year revenue, the company sees income from $2.185 billion to $2.235 billion.

With AI demand now in overdrive, PLTR could be on the verge of a big move — especially with the AI market expected to balloon to $1.81 trillion by 2030.

Marvell Technology (MRVL)

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Marvell Technology (NASDAQ:MRVL) has been just as explosive. Since late April, the MRVL stock ran from about $37.50 to $65.76 and could still race higher. Even Oppenheimer analysts say it could benefit from its AI exposure. The firm reiterated an outperform rating on the stock, with a price target of $70 a share. MRVL also said it’s still in the early stages of its AI ramp and even forecasted fiscal 2024 revenue to at least double from the prior year — and grow.

Earnings and guidance have been solid for Marvell, as well. In its April quarter, the company posted adjusted EPS of 31 cents, compared to expectations of 29 cents. Revenue jumped to $1.32 billion, compared to expectations of $1.3 billion. Guidance was just as good, with the company forecasting revenue to come in around $1.33 billion, which is also above Street forecasts for $1.31 billion.

SoundHound AI (SOUN)

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Or, we can look at SoundHound (NASDAQ:SOUN) again. Not to sound like a broken record, but as I noted on July 18, “the company is working with the auto industry, which could help place voice assistants into most vehicles.” Also, thanks to what the company called an “incredible surge in demand for conversational AI,” which I have mentioned before, the company recently saw a 56% increase in revenue year over year.

Even better, SOUN just announced that its SoundHound for Restaurants’ voice AI technology is available for integration with Oracle MICROS Simphony Point-of-Sale (POS) for Restaurants. As a recent company press release noted, Chief Product Officer and Co-Founder of SoundHound James Hom said, “restaurants are looking to voice technology to help drive sales, support employees and create a great customer experience. SoundHound’s advanced voice AI allows them to do just that with minimal onboarding and at a reasonable cost.”

Since March, SOUN ran from about $1.60 to a recent high of $5.11. After pulling back to $3.69, the stock is currently consolidating in a tightly coiled spring. From here, I’d like to see SOUN retest $5.11 and potentially see the double-digits shortly after.

On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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