The tech sector has been experiencing a pullback in recent weeks, as investors take profits from the strong rally that boosted many tech stocks to record highs. However, some analysts believe that this is just a temporary correction and that the long-term outlook for tech remains bullish. One of them is Daniel Ives, a 5-star analyst from Wedbush Securities, who has identified two AI-driven tech stocks that he thinks are worth buying amid the tech pullback.
SoundHound AI: A Leader in Voice and Audio Recognition
One of the stocks that Ives is bullish on is SoundHound AI, a company that specializes in voice and audio recognition using advanced machine learning and natural language processing techniques. SoundHound AI is best known for its music recognition capabilities, which allow users to identify songs by simply humming, singing, or even describing a few lyrics. The company claims to have the world’s largest database of music and sound data, with over 50 million songs and 20 million sound samples.
SoundHound AI also offers voice assistant and smart device solutions, which enable users to interact with technology through voice commands and natural language. The company’s Houndify platform is a cloud-based voice AI service that powers various applications and devices, such as Samsung’s Bixby, Honda’s cars, and Mastercard’s banking services. The company’s Hound app is a personal voice assistant that can answer complex queries and perform tasks across multiple domains, such as weather, sports, travel, and entertainment.
SoundHound AI has been growing rapidly in recent years, as the demand for voice and audio recognition has increased across various industries and markets. The company has raised over $250 million in funding from investors such as Tencent, Daimler, Orange, and Hyundai. The company has also expanded its global presence, with offices in North America, Europe, Asia, and the Middle East.
Ives believes that SoundHound AI is well-positioned to capitalize on the AI revolution, as voice and audio recognition become more ubiquitous and essential in the digital era. He says that SoundHound AI has a “unique and differentiated” technology that gives it an edge over its competitors. He also says that SoundHound AI has a “massive” market opportunity, as the voice AI market is expected to grow from $15 billion in 2020 to $40 billion by 2025.
Ives has a buy rating on SoundHound AI, with a price target of $6.50. This implies a staggering upside potential of 260% from the current price of $1.94.
Palantir Technologies: A Big Data Specialist with AI Capabilities
Another stock that Ives is positive on is Palantir Technologies, a company that provides data analytics and integration platforms that incorporate AI and machine learning capabilities. Palantir Technologies is known for its work with government agencies and defense contractors, such as the CIA, the FBI, the NSA, and the US Army. The company’s platforms help these clients collect, analyze, and share large amounts of data for various purposes, such as counterterrorism, cybersecurity, intelligence, and warfare.
Palantir Technologies also serves commercial clients across various sectors, such as healthcare, energy, finance, and manufacturing. The company’s platforms help these clients optimize their operations, improve their decision-making, and enhance their innovation. Some of the company’s commercial clients include BP, Merck, Airbus, Credit Suisse, and Ferrari.
Palantir Technologies has been growing steadily in recent years, as the demand for big data solutions has increased across both public and private sectors. The company reported revenue of $1.1 billion in 2020, up 47% year-over-year. The company also achieved positive free cash flow of $300 million in 2020, compared to negative $300 million in 2019. The company expects to grow its revenue by at least 30% annually in the next five years.
Ives believes that Palantir Technologies is a “unique” and “disruptive” player in the big data space, as it leverages its AI and machine learning capabilities to deliver value-added solutions to its clients. He says that Palantir Technologies has a “strong” competitive advantage in the government sector, where it has established long-term relationships and contracts with key agencies. He also says that Palantir Technologies has a “significant” growth opportunity in the commercial sector, where it can expand its customer base and diversify its revenue streams.
Ives has a buy rating on Palantir Technologies, with a price target of $20. This implies an upside potential of 30% from the current price of $15.41.
