These stocks are riskier options than Nvidia, but they also have the potential to generate better returns.
Nvidia There's no question that it's the hottest artificial intelligence (AI) stock of the past year and a half. Since the beginning of 2023, this chip maker's stock price has soared an incredible 500%. Many stocks don't produce those types of returns over long periods of time. Ten years Nvidia accomplished that in just 16 months. Given these types of gains, it's no wonder that many Wall Street analysts think the economy may be nearing its peak. Analyst consensus price targets suggest that Nvidia's stock price could only rise another 13% from now.
AI investors may want to consider other options with further upside potential. There are three stocks that analysts have a more bullish view on. Soundhound AI (Thorn 0.22%), Baidu (Bidu 1.49%)and UiPath (path 0.93%). Let's take a look at how much upside these stocks have and whether they're worth adding to your portfolio today.
1. SoundHound AI: 50% increase
SoundHound AI's analyst consensus price target is just under $7, which means SoundHound's stock could rise about 50% if it reaches that price within the next year.
SoundHound gained notoriety this year after investors learned that Nvidia was investing in the voice AI company. The company's AI voice platform helps incorporate AI into vehicles, drive-thrus, and other methods to create conversational experiences between users and AI. There is a lot of potential for this type of technology across many industries to power AI experiences for customers.
But the biggest problem is that despite all the hype surrounding SoundHound, its achievements are still quite modest. The company has a lot to prove considering how much competition there is.fast food restaurant chain wendyFor example, 's has already begun implementing an AI-powered drive-thru ordering experience through its FreshAI platform, which uses generative AI.
For SoundHound to be a good deal, it needs to prove that its technology is real and potentially better than its competitors. In his last three months of 2023, sales increased by a whopping 80% for him, totaling $17.1 million in sales. However, the business posted a net loss of $18 million, is running out of cash, and will likely need significant cash to invest in the business.
SoundHound AI could rise 50%, but if it does, it will likely be for speculative reasons. The company's fundamentals are not yet strong enough to warrant an immediate buy. For most investors, it's probably a little premature to invest in SoundHound AI.
2. Baidu: 60% increase
A stock with further upside potential is Chinese tech company Baidu, analysts said. Wall Street thinks it could rise about 60% to near $172. Companies that are often compared are: alphabetGoogle has a popular search engine platform and cloud business. The company is always looking to invest in new technologies, and AI is no exception.
The reason investors aren't overly bullish on the stock (it's down 11% this year) is because of concerns that the stock has close ties to the Chinese government. This is because it not only affects growth opportunities but also has the potential to cause problems. For future stock. Investors have long worried that Chinese stocks could be delisted from U.S. exchanges, with the U.S. government considering banning TikTok due to Beijing's influence. These concerns are likely to increase further.
In addition, Baidu's growth rate has slowed down somewhat. The company's revenue in 2023 increased by 9% to just under $19 billion. Ideally, AI investors want to see faster growth rates than they can be confident that a company is truly capitalizing on the huge growth opportunity in AI. However, with the number of users of the chatbot “Arnie” reaching his 200 million mark, Baidu has a potential growth catalyst that could help accelerate the company's growth rate. There are expectations.
Given Baidu's low valuation and trading at 10 times expected future earnings, Baidu stock appears to have a path to reaching analysts' price targets. Baidu is a great way to invest in China's high-tech market, and Chinese stocks are generally rising in value. It was underestimated for a time. However, this stock carries some high risk and is not suitable for all types of investors.
3. UiPath: 40% increase
UiPath has an automation platform that helps businesses create processes that save both time and money. It can remember and automate steps that users perform. Unfortunately, despite the potential value it could add to the company, UiPath stock has not been a great investment so far this year, declining 20% ​​year-to-date.
The company has had some promising results, posting revenue of $405.3 million in the quarter that ended Jan. 31, a 31% year-over-year growth. Another positive news for the business is that it posted a total profit of $33.9 million in the last quarter, which is a significant improvement from the same period last year, when UiPath had a net loss of $27.7 million.
Analysts believe that UiPath's stock price could rise 40% from current levels, reaching $27. Given the high growth rate, automation opportunities, and the fact that this business is profitable, this doesn't seem like an unrealistic proposition. With a price-to-earnings ratio (PER) of less than 1x, the stock could be a bargain for long-term investors.