Many artificial intelligence (AI) stocks skyrocketed in recent years as more companies used their AI hardware and software to automate, accelerate, and optimize their operations. But this year, many of the market's hottest AI stocks stumbled as the Iran war, inflation, and unclear monetary policies drove investors away from higher-growth and speculative investments.
That sell-off was painful for investors who had just hopped aboard the AI bandwagon, but it's creating some good long-term buying opportunities for investors who can tune out the near-term noise. Here are two unloved AI stocks that might be worth buying in May as the bulls look the other way: Snowflake (SNOW +0.56%) and SoundHound AI (SOUN 0.23%).
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Snowflake
Snowflake's cloud-based data warehouses help large companies centralize their data, making it easily accessible to third-party applications. That approach breaks down silos between different computing platforms, enabling companies to make faster data-driven decisions. It also offers flexible consumption-based plans that charge customers only for the storage and computing power they actually need, rather than locking them into rigid subscriptions.
Snowflake already serves over 13,000 global customers, and its platform processes an average of 6.3 billion queries every day. Its marketplace, which hosts ready-to-use data and applications for specific tasks, already has about 3,400 listings. It's also helping its customers analyze their data and build their own generative AI applications on its Cortex AI platform.
NYSE: SNOW
Key Data Points
Those qualities make Snowflake seem like a great AI play, but its stock has declined 33% this year amid investor concerns about slowing growth, persistent losses, and lower net revenue retention rates. In fiscal 2026 (which ended this January), Snowflake's product revenue rose 27% -- compared to its 30% growth in fiscal 2025 and 38% growth in fiscal 2024. Its year-end net revenue retention rate also dropped from 131% in fiscal 2024 to 125% in fiscal 2026.
Snowflake is still growing rapidly, but it was priced for perfection before its recent pullback. From fiscal 2026 to fiscal 2029, analysts still expect its revenue to grow at a 25% CAGR as companies aggregate more data for their AI applications. They also expect its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to increase at a 35% CAGR.
With an enterprise value of $50 billion, Snowflake might not seem like a bargain at 8 times this year's sales and 55 times its adjusted EBITDA. But that's the cheapest it's been since its 2020 IPO -- and it still has plenty of room to grow.
SoundHound AI
SoundHound AI develops AI-powered speech and audio recognition tools for restaurants, automakers, smart TV makers, and other companies that don't want to share their data with big tech companies. Its Houndify platform allows those customers to build custom applications.
From 2022 to 2025, SoundHound's revenue rose more than fivefold. Yet its stock has declined 14% this year and remains 65% below its all-time high from late 2024. Like Snowflake, SoundHound has been struggling with slowing sales growth and ongoing losses.
NASDAQ: SOUN
Key Data Points
Much of SoundHound's post-IPO growth was driven by acquisitions rather than the organic expansion of its core platform. However, those acquisitions (including SYNQ3, Allset, Amelia, Interactions, and LivePerson) are significantly expanding its presence in the booming restaurant digitization, agentic AI, and conversational AI markets. Those acquisitions are squeezing its near-term margins, but they could pay off over the long term as those AI markets expand.
From 2025 to 2028, analysts expect SoundHound AI's revenue to grow at a 16% CAGR. They also expect its adjusted EBITDA to turn positive in 2027 and 2028. With an enterprise value of $4 billion, SoundHound might still seem a bit pricey at 17 times this year's sales.
However, it still has plenty of irons in the fire -- and it might crush analysts' estimates if its newly acquired businesses generate stronger-than-expected growth. It's also an attractive takeover target for larger tech companies, so it's worth nibbling on after its latest pullback.
