Artificial intelligence (AI) stocks were the market's biggest winners last year as investors flocked to this area of great opportunity. Analysts expect the AI market to reach into the trillions of dollars in the coming years, which suggests some of today's early players in the field could benefit -- and so could investors who buy now and hold.
But this investing theme lost its momentum temporarily a couple of months ago. President Donald Trump announced tariffs on imports, and investors worried that such duties would lift prices -- which would weigh on consumers' wallets and companies' budgets. All this represented bad news for the economy and corporate earnings.
In recent weeks, though, investors have shrugged off their most negative thoughts as initial trade deals and talks between the U.S. and China have led to renewed optimism. On top of this, positive economic data -- from consumer sentiment to inflation figures -- also calmed investors' fears. All of this has helped indexes rally, and this bodes well for growth stocks such as AI companies in the months to come.
Let's zoom in on two AI stocks that could soar in the second half of 2025.
Image source: Getty Images.
1. Nvidia
Nvidia (NVDA +5.56%) investors have become used to major gains,as this top AI chip designer's shares soared 800% over the past two calendar years. But as of the start of this year, performance weakened amid the concerns I mentioned and the idea that Nvidia customers may rein in spending. Evidence from these customers, though, from Meta Platforms to Alphabet, shows investing in AI remains a priority -- and this is excellent news for Nvidia.
NASDAQ: NVDA
Key Data Points
Meanwhile, Nvidia's latest quarterly earnings report highlights this ongoing spending in AI, as revenue surged 69% to $44 billion. The company continues to see strong demand for its new Blackwell architecture and chip, especially in the area of inference, or the "thinking" an AI model must do to solve problems. Inferencing could represent a significant growth driver in the next stages of the AI story, so strength here is key.
Of course, Nvidia may face increased competition in the years ahead, but I'm confident that the company's leadership now and pledge to innovate annually will keep it a few steps ahead of its rivals. The tech giant has already set out its roadmap for chip releases through 2028, offering us evidence that it's well on the way to reaching its innovation goals.
So, it's clear Nvidia is positioned to gain over time -- but why is the stock set to soar now? Today, Nvidia trades for only 33x forward earnings estimates, down from 50x earlier this year, and many investors may see this as a great buying opportunity. From this level, Nvidia has plenty of room to run, and after a tough start to the year, any good news in the second half could prompt it to roar higher.
2. SoundHound AI
SoundHound AI (SOUN +13.93%) soared more than 800% last year amid market enthusiasm about AI stocks, and as the company reported accelerating revenue growth. But the uncertainties that weighed on AI and growth stocks in general hurt SoundHound's performance this year, dragging it down about 50%.
However, SoundHound's growth remains strong, and the company's long-term outlook is bright. SoundHound specializes in voice AI, with a product that stands out thanks to years of research and development. The company translates speech directly to meaning -- skipping the common step of translating speech to text. The SoundHound method results in improvements in speed and quality, and revenue growth shows customers are recognizing this.
NASDAQ: SOUN
Key Data Points
For most of last year, SoundHound reported double-digit quarterly revenue growth, and in the most recent two quarters, revenue has advanced in the triple digits. In this latest period, SoundHound said revenue surged 151% to a record of more than $29 million. Another good sign is the company has expanded its revenue base from initially the auto market to a broad range of industries -- and today, no customer represents more than 10% of revenue.
SoundHound may be in the early days of addressing a $140 billion market, so the company's revenue levels could skyrocket from current figures. Of course, this won't happen overnight, but as companies in various industries integrate AI in their processes to increase efficiency and cut costs, SoundHound could benefit.
All this means that now, on the dip, is the perfect time to get in on this growth story, as the shares could take off at any moment.
