Two AI Stocks Down Over 45% to Consider Buying This March

The rise of artificial intelligence (AI) technology presents an exciting opportunity for investors looking to build wealth by selecting the right stocks. Predictions indicate that the productivity improvements brought about by AI could contribute trillions of dollars to the global economy over time.

Following a strong performance in recent years, many top AI stocks have seen a decline this year. For long-term investors, this dip can represent a chance to acquire shares at lower prices and potentially benefit from substantial returns in the future. Here, we explore two AI stocks that have declined by more than 45% and are worth considering for purchase right now.

1. SoundHound AI

The company SoundHound AI (SOUN) is a frontrunner in voice assistant technology and has demonstrated significant revenue growth. However, the stock has fallen by 49% year-to-date, a decline that was amplified by an SEC filing revealing that Nvidia, a leader in AI chips, has sold its stake in SoundHound. Despite this, deeper analysis suggests that the market overreacted, creating a worthwhile buying opportunity.

SoundHound has collaborated with Nvidia on AI solutions for automotive applications, which gained visibility at CES earlier this year. Additionally, SoundHound is expected to showcase its generative AI voice technology at Nvidia's upcoming GTC 2025 event.

The company’s revenue nearly doubled in 2024, partly due to its acquisition of Amelia, enabling it to expand into new markets such as retail, banking, and healthcare. Recently, SoundHound made further strides by partnering with a prominent electric utility in the U.S., expanding its services into the energy sector.

Looking ahead, the company's management expressed optimism during the Q4 earnings call, reporting a healthy pipeline of upcoming projects and enhancing the capabilities of their products to increase customer value. For 2025, SoundHound has raised its revenue forecast to between $157 million and $177 million, reflecting a 96% increase compared to previous estimates.

Although SoundHound's price-to-sales ratio sits at a high 45, the company is well-positioned to grow into this valuation. Currently valued at around $4 billion, the potential growth could make it significantly more valuable in the next decade.

2. Dell Technologies

With tech companies investing heavily in infrastructure to support AI workloads, Dell Technologies (DELL) stands out as a strong candidate. According to Statista, the AI server market is set to grow from $31 billion in 2023 to approximately $430 billion by 2033, positioning Dell to capitalize on this expansion.

Although Dell's stock has fallen 46% from its peak in 2024 and is down 17% for the year due to concerns regarding tariffs and supply chain disruptions, the company's long-term prospects remain robust. Dell emphasizes that its supply chain is resilient and believes it can navigate through current challenges, with growth opportunities far outweighing these temporary setbacks.

Recently, Dell entered into a partnership with xAI, the creator of the Grok large language model. This collaboration has bolstered Dell's AI server backlog to $9 billion. Furthermore, Dell’s infrastructure solutions segment saw a revenue rise of 29% in 2024, reaching $43.6 billion and helping to counterbalance sluggish PC sales.

Revenue and adjusted earnings per share for Dell are projected to grow by 8% and 14%, respectively, in 2025, primarily driven by heightened demand for servers.

Moreover, Dell continues to see strong performance in its traditional servers and storage solutions. Its PowerStore product has garnered significant demand over the last few quarters, indicating that Dell is providing superior services and maintaining its market leadership.

Looking into the future, Dell anticipates that the market for AI hardware and related services will expand annually at a rate of 33%, reaching $295 billion by 2027. As the demand for AI-capable PCs increases, especially with the end of Microsoft’s support for Windows 10, Dell’s PC business should also benefit.

Importantly, Dell’s valuation is attractive, trading at around 10 times expected earnings for 2025, and offers a forward dividend yield of 2.2%. This low valuation seems to reflect the market's pessimism about Dell's PC business, while strong demand for its infrastructure solutions is driving consistent double-digit earnings growth, suggesting considerable return potential for investors.

AI, Stocks, Investment