Conversational artificial intelligence (AI) Stocks are red hot right now, and this might be the right time to consider some of the more well-known competitors in the field. However, there are also a couple of lesser-known businesses in this niche market that are worth checking out.
While conversational AI software has been around for a while, the emergence of OpenAI ChatGPT chatbot brought public attention to this kind of platform. This software can power search engines, customer service, coding, and more.
OpenAI is not a publicly traded company, but you may consider other companies that offer investors exposure to conversational AI. So, check out these stocks and do your due diligence for potentially powerful returns in this fast-growing segment of the tech market.
Google parent company alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) may seem like an obvious choice for machine learning exposure in the stock market. After all, Alphabet has been in the AI arena for a while. However, I’m actually going to select Alphabet’s main rival, Microsoft, for this list. Although you can’t directly invest in OpenAI, you may want to consider buying MSFT shares, as Microsoft is investing $10 billion in OpenAI and its ChatGPT conversational AI software.
Microsoft is making a smart move by integrating the powerful ChatGPT platform into its Bing Internet search engine. This will pose a direct threat to Google’s search engine dominance. Also, Alphabet’s answer to ChatGPT, known as Bard, is already gaining a negative reputation. As Reuters reported, Bard allegedly “shared inaccurate information in a promotional video.”
That’s not a good start for Alphabet as it tries to rival Microsoft in the conversational AI arms race, so expect GOOG/GOOGL stock to remain weak and MSFT stock to strengthen over time.
What is the target price for MSFT shares?
MSFT has a Strong Buy consensus rating based on 25 Buys, three Holds and one Sell rating assigned in the last three months. Average Microsoft stock price target of $291.07 implies an upside potential of 10.36%.
Perhaps Microsoft’s actions are not pure enough in the field of machine learning. For a more direct exposure to conversational AI and AI in general, take a look at C3.ai actions. This is a company that beats EPS estimates time and time again and continues to increase its income each year.
C3.ai has customers like the US Air Force, and it’s a nice bonus to know that you’re investing in a company with large-scale government customers. Additionally, C3.ai continues to push the boundaries of generative AI (a close cousin of conversational AI) with the recent releases of the C3 Generative AI Product Suite and C3 Generative AI for Enterprise Search.
What is the target price for AI shares?
AI has a Hold consensus rating based on two Buy, two Hold and three Sell ratings assigned in the last three months. Due to its recent rally, the average C3.ai stock price target $16.50 implies a downside potential of 26.55%.
Now, I’ll introduce you to a couple of machine learning specialists you may have never heard of: SoundHound AI and BigBear.ai Holdings (New York Stock Exchange:BBAI). It’s fine to review both companies, but I’m only bullish on SoundHound AI.
Like C3.ai, BigBear.ai does business with the US Air Force. However, the company appears to be more involved with cybersecurity-related machine learning than conversational AI. Also, it’s annoying that he received a delisting threat from the New York Stock Exchange and that he only has a retention rating from a Wall Street analyst.
As we’ll discuss in a moment, SoundHound AI is viewed positively by the analyst community. Additionally, the company launched a conversational AI platform called Dynamic Interaction, which not only recognizes and understands speech, but also responds and acts in real time. On the financial front, it is implementing downsizing and restructuring strategies and as a result expects to deliver revenue growth of more than 50% and turn a profit sometime this year.
What is SOUN’s share price target?
SOUN has a consensus Strong Buy rating based on three unanimous Buy ratings assigned in the last three months. Anyway, the average SoundHound AI Stock Price Target of $3.70 implies a downside potential of 7.6%.
Conclusion: Conversational AI Actions Are Worth Trying
As we have discovered, conversational AI actions are not all created equal. Some offer pure games in this industry niche, while others are less direct but still worth considering. It might be worth taking a look at all of them and picking your favorites for a buy and hold bet.
