After a 33% plunge in 2022, the Nasdaq-100 technology index is on the road to recovery in 2023 with a 38% gain so far. The powerful rally is in line with historical data suggesting the index tends to bounce back with a vengeance following a down year.

Since 1986, the Nasdaq-100 has only declined in consecutive years on one occasion: during the dot-com tech bust from 2000 to 2002. Every other time the index suffered an annual loss (1990, 2008, and 2018), it came roaring back the very next year.

But here's the kicker: Its average return in those bounce-back years was 52%! Therefore, since the index is only up 38% so far in 2023, there's room for further gains ahead. If history repeats, here are two stocks investors will want in their portfolios.

1. Confluent

Confluent (CFLT 0.58%) is a revolutionary company offering data streaming technology to nearly 4,700 business customers globally. According to the International Data Corporation, 90% of the world's 1,000 largest companies will be using data streaming by 2025, and Confluent thinks it's already a $60 billion opportunity. So what is it exactly?

If you recall, movies used to be stored on DVDs and played using a DVD player at the owner's leisure. But today, movies are streamed using the internet instead -- the content is stored in a data center and stands ready to play on demand with no disc required by the end-user.

If we apply the above concept to data streaming, data would be the movie, on-premise hard drives would be the DVD, and Confluent is the new-age data streaming provider. See, before cloud computing existed, businesses would warehouse their valuable data and analyze it at a later date. That process worked fine, except they were constantly looking in the rearview mirror. Confluent (and data streaming) allows businesses to ingest, analyze, and learn from their data in real time instead.

It has several real-world implications. A sports betting platform can use data streaming to adjust the odds during a live game, feed them to users, and accept bets all within seconds. Retail giant Walmart, on the other hand, uses data streaming for inventory management. Every time a product is sold at one location (or online), Walmart is notified in real time so it can replenish the shelves before that item runs out of stock. It ensures customers always find exactly what they're looking for.

In the first quarter of 2023, Confluent generated $174.3 million in revenue, up 38% year over year and comfortably above its prior guidance of $167 million (at the midpoint). Its remaining performance obligations, representing the company's pipeline of work, reached an all-time high of $742 million. Those results come as no surprise, given that Confluent now serves a record 1,075 businesses spending at least $100,000 on its platform annually.

If Confluent's estimates about the size of the data streaming market are true, it has barely scratched the surface of its opportunity.

Its stock remains 65% below its all-time high amid the broader sell-off in the tech sector last year. But it has soared 55% in 2023, outpacing the Nasdaq-100. So if the index continues to move higher for the rest of 2023, there's a very good chance Confluent will follow.

2. SoundHound AI

Let me be clear: Investing in SoundHound AI (SOUN 5.70%) is not for the faint of heart. This small-cap stock has surged 135% year to date, though the company is still valued at just $900 million, so the risk of volatility is high. SoundHound has plenty of merit (which I'll cover below), but it could really benefit from further gains in the Nasdaq-100, because that typically leads to a higher risk appetite among investors.

SoundHound's area of focus is conversational artificial intelligence (AI). In other words, it specializes in developing AI applications capable of understanding voice prompts and responding in kind. It serves a host of business customers, from restaurants to the world's largest car manufacturers.

Restaurants are using SoundHound to completely automate the customer experience with AI-powered voice tools capable of handling tableside orders, takeout orders over the phone, and even processing drive-thru customers. Plus, the company says diners spend 30% more money when using self-service kiosks in-store, as opposed to placing an order with a human across the counter, so AI tools can not only reduce staffing costs but also increase revenue.

Car manufacturers, on the other hand, are using SoundHound as an in-car voice assistant capable of retrieving information about the weather, sports, and local restaurants. It's powered by generative AI, and it's built on a mix of in-house technology and an integration with OpenAI's ChatGPT software. SoundHound has signed several enormous brands, including Mercedes Benz, Kia, and Honda, to name just a few.

SoundHound generated just $6.7 million in revenue during the first quarter of 2023. It's still in the scale-up phase, attempting to manage increasing demand against what it's capable of actually delivering in the short term. That's reflected in the company's bookings backlog, which came in at a whopping $335 million in the latest quarter, up 46% year over year.

Simply put, customers want the AI products SoundHound has developed, and they're quickly getting in line by making commitments. Now, the company has to execute so those bookings turn into revenue.

As indicated above, the gain in SoundHound stock this year is over three times greater than the gain in the Nasdaq-100. That outperformance will likely improve if the index continues to march higher, especially given the company's prospects and impressive customer list.