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The stock market’s robust performance in 2023, with a 28% gain in the S&P 500 since the October 2022 low, has prompted analysts to suggest the arrival of a potential bull market. Projections for 2024 indicate further upward movement, making it an opportune time to explore promising Nasdaq stocks, particularly in the AI sector.
1. Advanced Micro Devices (AMD)
Shares of Advanced Micro Devices (NASDAQ: AMD) have surged by 100% in 2023, setting the stage for continued growth in 2024. The resurgence in the personal computer (PC) market, coupled with the introduction of AMD’s AI chips, positions the company for substantial gains.
Factors Driving AMD’s Potential:
- PC Market Resurgence: Canalys projects an 8% jump in PC shipments in 2024, driven by the Windows refresh cycle and increased sales of AI-powered PCs.
- Revenue Growth: AMD’s client segment revenue rose by 42% in Q3 2023 to $1.5 billion, with Ryzen processor sales experiencing a significant uptick.
- AI Opportunities: Major cloud providers, including Microsoft and Meta Platforms, plan to utilize AMD’s AI chips for large-scale language model training, offering AMD a significant market share.
Anticipated AI Revenue Surge:
- Market Potential: AMD estimates the addressable market for its AI chips to reach $45 billion in 2023, with a projected increase to $400 billion by 2027.
- Earnings Outlook: Analysts foresee a 40% earnings jump in 2024, reaching $3.71 per share, reflecting AMD’s strong position in the AI market.
2. SoundHound AI (SOUN)
Analysts anticipate SoundHound AI (NASDAQ: SOUN) to achieve remarkable growth in 2024, with a median 12-month price target suggesting a 140% increase from current levels.
Key Factors Driving SoundHound AI’s Upside:
- Revenue Projection: SoundHound anticipates a 50% revenue spike in 2023, reaching $46.7 million, with expectations to sustain this growth rate in 2024.
- Strong Revenue Pipeline: The company concluded the previous quarter with a bookings backlog of $342 million, emphasizing increased adoption of its AI platform for voice-enabled solutions.
Valuation Consideration:
- Market Position: Despite a 16% rise in 2023, SoundHound AI’s stock presents an attractive opportunity with a lower sales multiple of 12 compared to its 2022 price-to-sales (P/S) ratio of 13.
- Investor Advantage: At the current valuation, investors can capitalize on the robust revenue growth potential of the company.
As the market gears up for potential bullish trends in 2024, investors may find these AI stocks, AMD and SoundHound AI, well-positioned for significant gains. Analysts foresee both companies benefiting from the expanding AI market and technological advancements.
