Artificial intelligence (AI) could have a profound impact on the economy in the coming years, perhaps even larger than the internet or smartphones. In fact, Cathie Wood's Ark Investment Management believes AI could increase the productivity of knowledge workers, like software engineers, by as much as tenfold by 2030.

As a result, it's no surprise that businesses are racing to embed AI technology into their day-to-day operations. An estimate by McKinsey & Company suggests that 70% of companies worldwide will be using AI by the end of this decade, and that could present a significant opportunity for investors.

Early adopters of AI could benefit most

McKinsey's findings send a clear message to businesses: The sooner they adopt AI, the greater the positive impact it will have. The firm says companies that begin using AI today and develop it over the next five to seven years could see a whopping 122% increase in their free cash flow by 2030. On the other hand, companies that never implement an AI strategy could see their free cash flow decline by as much as 23% over the same period.

I'll present two stocks that could be among the biggest winners as AI adoption progresses. SoundHound AI (SOUN 14.30%) is a developer of AI technologies for businesses, and SentinelOne (S 4.10%) uses AI to protect customers from an increasingly risky cyber landscape. Here's why investors will want to buy both of them for the long run.

1. SoundHound AI

Let me be perfectly clear: SoundHound AI stock will likely present more risk than many investors are comfortable with. It's down 86% from its all-time high, and the company is valued at just $430 million as of this writing. That could be a recipe for volatility as small amounts of money can trigger large swings in its stock price. However, if SoundHound can execute on its business strategy, it could become a very important provider of AI services to some of the world's largest companies.

In fact, it already serves automotive giants, like Stellantis and Honda, and hospitality behemoths, like White Castle and Block Inc's payments division, Square. So, what does SoundHound do? It develops conversational AI tools capable of understanding voice prompts and responding in kind.

This technology can power in-car assistants, which provide the driver with information upon request, whether it relates to sports results, the weather forecast, or even navigation. It's also highly useful for restaurants because conversational AI can support automated drive-thru, phone, and even dine-in ordering at the table.

But SoundHound continues to expand its addressable market by catering to more potential customers. In the second quarter of 2023 (ended June 30), the company said it was working with producers of consumer goods, like printers and coffee machines, and a large telecommunications company. Its technology could substantially reduce labor hours in the future, which will be a major cost saver for businesses.

SoundHound is still trying to scale its business, so its financial results are often lumpy. In the second quarter, the company generated $8.7 million in revenue, which marked an increase of 42% year over year. While it doesn't sound like there's much money coming in, the company has amassed an order backlog worth $339 million, so demand for its technology is clearly building.

SoundHound made a net loss of $21.9 million during Q2 and probably won't be profitable for some time. With only $115 million in cash on its balance sheet, there is a high likelihood that it will need to conduct another capital raise to fund its growth.

Despite the risks, if SoundHound continues to execute and convert its backlog into revenue, its stock could deliver substantial returns in the long run. It certainly has the technology and customer base to warrant a small position in your portfolio. If you were to buy the stock, you would join AI giants like Nvidia and Oracle, which have both invested in SoundHound AI in the past.

2. SentinelOne

The corporate world continues to thrive in the digital economy thanks to revolutionary technologies like cloud computing, which empowers them to streamline their operations and reach a global customer base. But that also creates substantial risks because companies are storing their valuable data, applications, and digital assets online, where they are vulnerable to cyberattacks around the clock.

SentinelOne is an up-and-coming cybersecurity software provider, except it's focused on automated protection powered by AI. Its flagship Singularity platform offers protection in the cloud, at the endpoint, and from identity theft, complete with proactive threat-hunting tools and automated incident response. The company also has a patented one-click resolution system that allows security managers to reverse any unauthorized changes instantly should a successful breach occur.

According to Palo Alto Networks, 23% of security alerts are ignored by cybersecurity managers because attacks are so frequent that their human-led processes are buckling under the workload. That's a potential disaster waiting to happen for businesses, as data breaches have substantial financial impacts and shatter the trust of customers.

SentinelOne recently launched a generative AI product called Purple AI, designed to help with alert fatigue, among other things. It's a chatbot much like ChatGPT, which security managers can prompt to quickly determine points of vulnerability. They can even ask it to scan networks to hunt for a new threat potentially sweeping the corporate world. But critically, Purple AI will also neatly summarize security incidents so managers can save hours otherwise spent manually digging through data.

SentinelOne currently serves more than 11,000 business customers. But in the recent fiscal 2024 second quarter (ended July 31), it had 994 customers spending at least $100,000 per year on its platform -- a 37% jump year over year, outpacing its overall customer growth. That suggests larger organizations are flocking to AI-based cybersecurity tools at a faster rate than smaller enterprises, which is fitting as they have more complex networks and potentially face more risks.

During the quarter, the company generated $149 million in revenue, a 46% increase year over year. That was a significantly faster growth rate than CrowdStrike (37%) or Palo Alto Networks (26%) generated in the same period. SentinelOne is a much smaller company, so it's easier to grow more quickly. However, it does suggest it's snatching some market share from those competitors.

SentinelOne has cemented itself as a clear option for businesses seeking AI-powered protection in an increasingly digital world. Therefore, its stock might be a great long-term buy amid the coming AI revolution.