If you're looking for stocks that have the potential to make you a millionaire on a relatively modest investment, you're likely going to have to take some pretty big chances. That means looking for stocks that have huge potential but carry added risks. These types of stocks also rarely come at bargain prices.
But there are a few stocks out there with real potential to make you a millionaire on a modest buy-in. Let's look at three artificial intelligence (AI) stocks that have what it takes.
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1. IonQ
IonQ (IONQ 7.88%) offers a compelling long-term bet on quantum computing. Its systems have demonstrated low error rates and scalability, two important factors needed to develop fault-tolerant quantum computers. Fault tolerance is a measurement of a quantum computer's ability to self-correct and produce accurate results even when some parts experience errors. Quantum computing needs to achieve fault tolerance in order to be used in real-world applications.
Importantly, Nvidia CEO Jensen Huang recently said quantum computing was at an "inflection point." That's a big endorsement of the technology and a reversal from what Huang had said just a few months earlier. Meanwhile, IonQ is working with Nvidia and pharmaceutical giant AstraZeneca to use quantum computing for small-molecule drug development.
NYSE: IONQ
Key Data Points
Overall, IonQ is well-funded, with over $700 million in cash and investments and no debt. It's signing new commercial deals, building real quantum computing infrastructure at its Washington, D.C., manufacturing facility, and generating revenue. It's also been aggressive when it comes to acquisitions, buying rivals to help improve its technology.
Quantum computing is still in its very early innings, so there are a lot of risks involved. However, if quantum computing becomes the next big technological innovation after artificial intelligence, IonQ could be a big winner.
2. SoundHound AI
SoundHound AI (SOUN 4.56%) is trying to position itself as a leading AI voice and agent platform. At its core, SoundHound is a voice AI company. Its platform goes beyond basic speech-to-text, as it uses proprietary "speech-to-meaning" and "deep meaning understanding" technology designed to capture user intent in real time, enabling far more fluid and transactional voice interactions than legacy systems.
Today, the company generates revenue through subscriptions and royalties when its platform is embedded in devices or services. It's already gained strong traction in the auto and restaurant verticals, while its 2024 acquisition of Amelia brought it into the healthcare, finance, and retail industries.
NASDAQ: SOUN
Key Data Points
The launch of Amelia 7.0 last month was a major shift for the company. The platform merged SoundHound's next-gen voice recognition technology with autonomous AI agents. Its agents can do everything from paying bills to refilling prescriptions to helping remote employees troubleshoot technical issues. However, the company believes that its voice technology sets it apart, being able to "contain" conversations and significantly reduce escalations to humans.
SoundHound has been seeing hypergrowth, with revenue soaring 151% year over year in Q1. Meanwhile, it expects to reach adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability by year-end.
However, execution still matters, and there are risks. Gross margins have slipped since the Amelia deal, and there are a lot of competitors going after the AI agent space. However, by combining voice and agentic AI into one platform, the potential upside is enormous.
3. AppLovin
AppLovin (APP 6.11%) has become one of the biggest winners in adtech with its Axon 2 platform. The company says Axon 2's AI-based engine uses predictive algorithms to optimize ad targeting, bidding, and placement.
Since the launch of Axon 2 in 2023, the company has seen not only explosive revenue growth but also improving gross margins and robust free cash flow as well. This was on full display in Q1, when its advertising revenue surged 73% to $1.16 billion, while its gross margins increased 72.2% a year ago to 87.1%. Meanwhile, it generated $826 million in free cash flow.
NASDAQ: APP
Key Data Points
Currently, AppLovin mostly serves ads for gaming apps, and it believes this business can continue to grow at a 20% to 30% pace just from gaming market growth and its algorithm continuing to improve through self-learning. However, the big opportunity for the company is moving beyond mobile gaming into web-based and e-commerce ad markets. The company is currently testing its technology in this space, and if it can prove to be effective in these markets, then the stock could have a lot of upside from here.
That said, there are risks, and the company has drawn the attention of short-sellers. Four separate short reports have raised serious allegations, including unauthorized app installs, and most recently, Culper has accused the company of misrepresenting its ties to China. However, the stock also has its backers, including well-renowned billionaire investor Chase Coleman of Tiger Global, who took a position in the stock last quarter.
All in all, while the risks are high, if Axon 2 can prove to be effective beyond gaming, the upside is massive.
