The AI market is merging into an underlying infrastructure of the digital era. Built upon hardware and software solutions with cloud-based integration, AI tech is spread across computer vision, natural language processing, machine learning, and generative AI.
The AI market is creeping into all areas of human development, from these tech layers, manufacturing and healthcare, to finance and media. Tying these components together, Markets and Markets research forecasts a $1.3 trillion AI market size by 2032, giving it an impressive CAGR of 43%.
On that appreciation road, many AI-related stocks will fluctuate. Certain events especially will affect market sentiment, such as the earthquake in Taiwan, known as the semiconductor manufacturing hub. With that in mind, here are the AI stocks that are presently undervalued.
SoundHound AI, Inc. (NASDAQ: SOUN)
Over the month, SOUN stock has gone down 17%, but even on a 3-month scale, it has gone up 152%. Over the last 52 weeks, the average SOUN price is $2.88 vs. the current $5.22, with the lowest point being $1.49. The Californian startup aims to become the go-to solution for content creators who need a robust voice AI developer platform.
Harnessing voice generation and recognition, the SoundHound app can pick up on humming to identify songs. This led to partnerships with Honda (NYSE: HMC), Hyundai (OTCMKTS: HYMTF), and Mercedes-Benz to power their interactive features for voice-controlled navigation and other needs during driving.
Aiming to make voice a natural part of interfacing with technology, the company continues to improve its accuracy and intuitiveness in the age of the Internet of Things (IoT). Although still yielding negative earnings per share, SoundHound beat the last Q4 ‘23 estimate of $0.05 by $0.06.
As a high-growth stock, the net loss of $88.9 million was still a 24% year-over-year improvement, followed by impressive quarterly revenue growth of 80% YoY to $17.1 million. Nasdaq’s SOUN average price target is now $7.15 vs the current $5.20, which is close to the low forecast of $4.9. The high estimate exceeds $9.5 per share, a nearly double return potential.
Symbotic Inc. (NASDAQ: SYM)
Year-to-date, SYM stock is down nearly 10%, with the average 52-week price at $40.65 vs the current $44.78 per share. Over 52 weeks, its lowest point was half as that, at $22.40. Based in Massachusetts, Symbotic operates a direct sales business model, providing large clients with AI-powered warehouse logistics and distribution solutions.
These large clients are major retail chains, such as Target (NYSE: TGT), Walmart (NYSE: WMT), C&S Wholesale Grocers, and Albertsons (NYSE: ACI). In addition to revenue from direct sales, Symbotic charges fees for software support, spare parts, and other aftermarket services.
Symbotic’s largest partnership happened in July 2023 with GreenBox joint venture, in collaboration with Japanese investing conglomerate Softbank. The two own GreenBox at a 65% to 35% ratio in favor of Softbank as the first warehouse-as-a-service (WaaS) to automate supply chain services.
In February, Q1 FY24 earnings, Symbotic reported a net loss of $12.9 million, an improvement of 81% from the net loss of $67.9 million in the year-ago quarter of 2022. Likewise, the company’s gross profit margin increased from 17.3% to 20% over that period.
Twelve months ahead, Nasdaq’s average price target of SYM is $53.44 vs the current $44.78, which aligns with the low estimate of $44. The high forecast is sitting at $62 per share.
Beamr Imaging Ltd. (NASDAQ: BMR)
Year-to-date, this rapidly growing penny stock has had a 233% boost, down 17% over the month. At its lowest 52-week point, BMR was only priced at $0.91 vs. the current $5.97 per share. As the young startup’s name suggests, Beamr Imaging is using AI-trained computer vision to compress up to 50% of video size without significantly reducing quality.
Having partnered with Nvidia, Beamr is looking to become the go-to solution for AI-powered video processing, encoding, and optimization. This should not only be used by online video editors and podcasters but also by companies like Walmart or Netflix.
Both require superior video compression to scale up and reduce costs, offered by the emerging video format AV1. Although Beamr did not develop AV1, the company collaborated with Nvidia to accelerate its adoption.
In its March annual letter to shareholders, CEO Sharon Carmel noted the company’s efforts will go into expansion, built upon the launch of Beamr Cloud last year. In line with the other two AI companies, Beamr reported a net loss improvement from $1.2 million a year ago to $0.7 million. Most importantly, the small startup ended-up with $6.1 million in cash vs $0.7 million ending 2022.
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Disclaimer: The author does not hold or have a position in any securities discussed in the article.
The post Three AI Stocks That Are Trading at a Discount in April 2024 appeared first on Tokenist.
