2 AI Stocks Down More Than 45% to Buy in March

The rise of artificial intelligence (AI) technology brings the potential for significant wealth-building opportunities for investors. Projections indicate that the productivity enhancements associated with AI could contribute trillions of dollars to the global economy in the long run.

After experiencing impressive growth in recent years, many leading AI stocks have seen a decline this year. For investors with a long-term perspective, this market correction may present a valuable opportunity to secure promising stocks for future gains. Here are two stocks that are currently trading significantly below their highs and are worth considering for purchase now.

1. SoundHound AI

SoundHound AI (SOUN) is a frontrunner in voice assistant technology, currently witnessing strong revenue growth. However, the stock has dropped 49% year-to-date after a surge in 2024. The decline was exacerbated by an SEC filing that disclosed that AI chip giant Nvidia sold its stake in the firm. A thorough examination suggests that this sell-off was an overreaction, presenting an appealing buying opportunity.

SoundHound has collaborated with Nvidia on AI solutions for automotive technology. Their partnership was highlighted at CES earlier this year, and SoundHound is set to showcase its voice assistant technology utilizing generative AI at Nvidia's upcoming GTC 2025 event.

The company's revenue nearly doubled in 2024, in part due to their acquisition of Amelia, which helps expand its reach beyond vehicles and restaurants into sectors like retail, banking, and healthcare. Additionally, SoundHound has entered the energy sector through a partnership with one of the largest electric utilities in the U.S.

Management has expressed optimism about the company's future, indicating a robust pipeline of new opportunities. They have also raised their revenue guidance for 2025 to between $157 million and $177 million, representing an expected increase of 96% at the midpoint.

While the stock trades at a price-to-sales ratio of 45, it possesses the growth potential to justify this valuation. Currently valued at $4 billion, SoundHound is a mid-cap company with prospects for significant appreciation in the next decade.

2. Dell Technologies

As tech companies invest heavily in enhancing their computing capabilities for AI applications, Dell Technologies (DELL) is well-positioned to benefit. According to Statista, the global AI server market is expected to expand from $31 billion in 2023 to $430 billion by 2033. Dell generates a sizable portion of its revenue from selling PCs and related products, but a significant 46% comes from its infrastructure solutions group, which includes servers.

Currently, the stock is down 46% from its all-time high in 2024 and off 17% year-to-date due to concerns regarding tariffs and potential supply chain disruptions. However, Dell maintains confidence in its resilient supply chain and believes that its long-term potential outweighs any immediate impacts from tariffs.

Recently, Dell secured a deal with xAI, the creator of the Grok large language model, which has enhanced its AI server backlog to $9 billion. The company's infrastructure solutions sector reported 29% revenue growth in 2024, reaching $43.6 billion, helping to offset declining PC sales. Dell anticipates an 8% increase in revenue and a 14% rise in adjusted earnings per share in 2025, primarily driven by demand for servers.

Dell continues to grow its traditional server and storage businesses, with strong demand for its PowerStore product, which has performed well over the past four quarters. This indicates that Dell is not just selling servers, but providing valuable services that bolster its market leadership.

Looking ahead, Dell estimates that the market for AI hardware and services will grow annually by 33% to reach $295 billion by 2027. The demand for its PC products is also expected to improve as businesses and consumers upgrade to AI-capable devices. Additionally, the end of Microsoft support for Windows 10 could boost demand for new PCs.

Importantly, Dell's stock appears undervalued, trading at just 10 times 2025 earnings estimates, and its current share price offers a forward dividend yield of 2.2%. This valuation likely reflects subdued expectations for Dell's PC segment, but the rising demand for its infrastructure solutions indicates robust earnings growth potential, presenting substantial upside for long-term investors.

AI, Stocks, Investing