The recent market correction paves the way for exploring compelling opportunities for investors looking for AI stocks to buy.
The stock market has slipped into correction territory, with key indexes shedding significant value. This slump follows record highs for artificial intelligence (AI) stocks last year, which were driven by a small group of powerful businesses from the Magnificent Seven.
As we chart new waters, the Federal Reserve has indicated that interest rates would remain high for longer due to ongoing inflation in the world’s largest economy. This approach has no immediate plans for a decrease, which adds to investors’ uncertainty.
Thus, investors now want more than just inflated growth metrics. They demand tangible results that benefit both the top and bottom lines. However, we are still in the early stages, so now is an excellent opportunity to stock up on these three AI stocks.
AI Stocks to Buy: Meta Platforms (META)
Meta Platforms (NASDAQ:META) is a digital behemoth that revolutionized social media and owns platforms like WhatsApp and Instagram. Additionally, it is a pioneer in the AI revolution, constantly developing to incorporate cutting-edge AI technologies that boost user engagement.
Moreover, Meta is taking things to the next level by building on OpenAI’s ChatGPT initiative. New products like Llama 3 and the addition of real-time image generators to WhatsApp demonstrate this commitment to generative AI. With these developments, Meta is all set to take on its competitors head-to-head and become a significant force in the AI realm.
Furthermore, Meta started off the year with a banger in the first quarter. Its revenue bumped around 27% year-over-year (YOY) to a mind-boggling $36.46 billion, beating estimates by $240 million. Likewise, its earnings-per-share (EPS) clocked in at $4.71, slashing analyst expectations by 39 cents. Despite these fantastic results, we witnessed a dip in the company’s shares after it provided a cautious outlook. Nevertheless, this presents a lucrative chance to buy the stock and maximize long-term profits.
SoundHound (SOUN)
SoundHound (NASDAQ: SOUN) is at the forefront of interactive AI, a sector expected to grow rapidly. The company uses AI to provide contemporary text-to-speech and speech recognition capabilities, enabling real-time translation and applications. This expertise broadens its customer base to restaurants, automobiles, and support centers.
Moreover, Nvidia’s (NASDAQ: NVDA) announcement on the ownership position in SOUN catapulted the stock to the top charts. However, NVDA’s plan to sell up to 150 million shares was not well received and resulted in over 10% drop in SOUN’s stock price last month. Yet, TipRanks analysts are optimistic and see a stellar 59% upside potential.
This upside potential is stoked by the SOUN’s bright future growth prospects. The company has projected revenue for the fiscal year 2024 between $63 million and $77 million, which is greater than the $69.73 million average analyst estimate.
Lastly, with a 112% price upswing this year and trading approximately 50% below its peak of $10.25, a considerable horizon lies ahead for this small stock.
AI Stocks to Buy: UiPath (PATH)
UiPath (NYSE:PATH) specializes in robotics process automation (RPA), a niche that harnesses software robots and AI to streamline routine tasks. As businesses increasingly emphasize cutting costs and increasing productivity, robust automation solutions will become essential. Since PATH is regarded as the best RPA tool available, these developments will benefit it greatly.
Building on this trend, UiPath has included Watsonx.ai capabilities into its platform in partnership with IBM (NYSE:IBM), giving users access to core AI models. The claim is that more than 1,500 businesses use UiPath Autopilot, resulting in consistent weekly production and expression.
This technological leap has propelled UiPath’s impressive financial growth. In Q4, the company notched a revenue of $405.25 million, up 31.4% YOY and surpassing estimates by $21.56 million.
Looking ahead, UiPath anticipates generating $330 million to $335 million in revenue for Q1 of the 2025 fiscal year instead of the analysts’ projected $338 million. If we add the 40% upside potential assigned by TipRanks analysts, UiPath shines as a prime choice among AI stocks to buy.
On the date of publication, Nabeel Bukhari did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
