Finding millionaire-maker artificial intelligence (AI) stocks isn't as easy as one might think. Generating huge returns from a single stock is rare, although there are several prominent examples out there. The key is to find a company that's offering a product to a wide range of businesses, and is in an early enough stage where massive upside is still possible.
I think SoundHound AI (SOUN 1.11%) fits that description, and follows the pattern of another millionaire-maker stock: Nvidia.
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SoundHound AI is focused, but is expanding to other industries
SoundHound AI offers software that merges AI and audio recognition. This allows SoundHound AI's products to deploy AI agents where human-to-human interaction occurs. One of SoundHound AI's best examples of where this has been successful is in a fast food drive-thru. By automating this application, SoundHound AI has helped restaurants increase their profit margins in a notoriously cutthroat business. That's still a relatively small portion of the market, and is only a fraction of where SoundHound AI could be.
The holy grail for SoundHound AI will be to automate any industry that has significant customer service reps, such as the financial industry, insurance, and healthcare. All of these industries employ countless customer service agents, but if AI agents can automate them, that will be massive cost savings for their clients, which will, in turn, cause SoundHound AI's finances to skyrocket. It's already singing for many companies in these industries, so SoundHound AI could be on its way to becoming the next millionaire-maker stock.
NASDAQ: SOUN
Key Data Points
I think this echoes the path Nvidia took. If you had invested $10,000 into Nvidia stock a decade ago, that would now be worth nearly $2 million. Nvidia started on a similar path, developing GPUs for gaming graphics -- a fairly niche industry. Eventually, GPUs saw increased usage in other fields like engineering simulations and cryptocurrency mining. AI has become its largest use case to date, and has caused the stock to skyrocket as demand soared.
SoundHound AI may never get as big as Nvidia. Still, if it can follow a similar path of starting with a focused product and gradually expanding into larger industries, I think it could be a real winner. There is a huge application for its products; now the task becomes developing a product good enough that consumers don't demand a human operator. If it can achieve that, the sky is the limit for SoundHound AI's stock.
