Smashing its EPS and revenue estimates by $0.17 and $670 million respectively, NVIDIA Corporation (NASDAQ: NVDA) jumped more than 25% in after-hours trading. Almost 60% of the $7.19 billion NVDA recorded in revenue was from AI-related activity and NVDA expects that the vast majority of its sequential increase in revenue in Q2 will come from data centers. After such big news the AI sector could run rampant and BigBear.AI Holdings, Inc (NYSE: BBAI), SoundHound AI, Inc (NASDAQ: SOUN), and Guardforce AI Co., Limited. (NASDAQ: GFAI) are AI stocks that could be setting up for major runs this week.
BBAI Stock News
BigBear.ai Holdings, Inc. (NASDAQ: BBAI) has diverse AI applications, serving different sectors in different ways. That was made more apparent after BBAI secured an exclusive deal with both Children’s Hospital Colorado and Thomas Jefferson University Hospitals. That is a huge deal for BBAI as it was mainly operating in the defense sector, which it has been seeing a lot of success in lately. Earlier in April BBAI signed a contract with L3Harris Technologies, Inc. (NYSE: LHX) a key leader in unmanned and autonomous systems to be its exclusive partner to deliver AI/ML-based forecasting. These contracts are proof that BBAI is seen as a long-term player in the AI sector that is diversifying its portfolio of customers.
Furthermore, BBAI also beat its revenue estimates earlier this month by $4.82 million recording $42.2 million and it is looking to achieve positive cash flow in the second half of the year. Meanwhile, it is worth noting that BBAI stock usually runs on industry-wide catalysts like its recent 82% run in April on news of Elon Musk starting an AI company – X.AI. Considering NVDA’s earnings being driven by AI, BBAI stock could see a similar run as the AI sector is set to witness high momentum this week.
Media Sentiment
@ACInvestorBlog is keeping an eye on BBAI stock and other AI stocks.
Technical Analysis
BBAI stock’s trend is neutral with the stock trading in a sideways channel between $2.36 and $2.51. Looking at the indicators, the stock is trading below the 200 MA which is a bearish indication, and is currently testing the 21 and 50 MAs. Meanwhile, the RSI is neutral at 51 and the MACD is approaching a bullish crossover.
As for the fundamentals, BBAI stock and other AI stocks are expected to run in sympathy with NVDA thanks to its AI-driven revenue growth. With AI showing its capability to drive more revenues in the future, BBAI stock could be a profitable buy at the current PPS especially since it is trading near support.
SOUN Stock News
Another promising AI stock that could soar in sympathy with NVDA stock is SoundHound AI, Inc. (NASDAQ: SOUN) which expects its addressable market could reach $160 billion in the next 3 years. Given that AI is growing day by day and is getting integrated into almost all industries, SOUN’s expectations do not seem impossible.
SOUN mainly operates on a 3 pillar business where in its first pillar it powers devices such as cars, TVs, and IoTs. It is worth noting that SOUN is seeing huge success in this pillar as the number of cars shipped with SoundHound technology more than doubled YoY in Q1.
The second pillar revolves around customer service applications which SOUN is working on expanding by releasing SoundHound Chat AI, its own Large Language Model (LLM). It is expected that SOUN will increase its AutoStore market by more than 10x in the near term which makes SOUN stock an attractive investment in the AI sector. Meanwhile, SOUN’s third pillar is a combination of both the first and the second pillars as it creates a monetization ecosystem that brings the services from pillar two to the products in pillar one.
Through the first pillar, SOUN generates the bulk of its revenues, however, that may change as voice-enabled services are the future in restaurants and customer support-related jobs and are due to fast growth as AI adoption increases. In this way, SOUN expects to realize $43 million to $50 million in revenues in 2023.
While SOUN missed on its revenue estimates in Q1, it only missed by $0.03 million and recorded $6.7 million in revenue. Even if it is not as impressive as NVDA and BBAI, SOUN still finished the quarter with a strong balance sheet of $46 million in cash. It is also worth noting that SOUN gained more than 36% after Microsoft Corporation (NASDAQ: MSFT) released its earnings in late April which showed AI’s role in growing its revenues. Considering the significance of NVDA’s earnings, SOUN stock may replicate its run this week as more investors look to gain exposure to the AI sector.
Media Sentiment
@JaviCharts is watching SOUN stock closely following NVDA’s earnings.
Technical Analysis
SOUN stock’s trend is bullish with the stock trading in an upwards channel. Looking at the indicators, the stock is trading above the 50 and 200 MAs which are bullish indications, and is currently testing the 21 MA as a resistance. Meanwhile, the RSI is neutral at 54 and the MACD is approaching a bullish crossover.
Following NVDA’s earnings, AI stocks including SOUN stock are expected to soar as NVDA’s earnings highlight the rising demand for AI. In light of this, investors could find a good entry in SOUN stock at the current PPS to capitalize on the growing interest in AI stocks.
GFAI Stock News
Guardforce AI Co., Limited (NASDAQ: GFAI) is no stranger when it comes to running in sympathy with other companies’ catalysts. Earlier in April, GFAI stock gained more than 650% before settling due to a short squeeze thanks to its high short interest rate then and the AI craze following Musk’s AI venture. Moreover, GFAI soared 80% after Alphabet Inc (NASDAQ: GOOGL) released its annual report when the company mentioned AI’s role in its future. Given NVDA’s positive earnings, GFAI stock is highly likely to continue its trend and see a jump in its PPS.
While GFAI revenue slightly decreased 2% YoY, its robotic AI segment revenue grew by more than 245%. That coupled with GFAI expanding its operations in mainland China, one of the largest growing robotics markets in the world, makes the outlook for GFAI stock fairly positive.
Media Sentiment
@stockplaymaker1 is watching GFAI stock for a run thanks to the bullish sentiment surrounding AI stocks.
Technical Analysis
GFAI stock’s trend is neutral with the stock trading in a sideways channel between $4.93 and $6.21. Looking at the indicators, the stock is trading below the 200, 50, and 21 MAs. Meanwhile, the RSI is neutral at 43 and the MACD is approaching a bullish crossover. It is worth mentioning that there are two gaps on the chart near $11.79 and $7.3 that may be filled in the future.
Now that the AI sector is gaining momentum thanks to NVDA’s earnings, GFAI has the potential to fill its gaps considering its popularity among AI stocks. With the stock trading near support, the current PPS could be an attractive entry to capitalize on a potential multi-day run on NVDA’s earnings.
AI Stocks Forecast
AI and AI stocks are hot topics right now. After NVDA announced its extremely positive Q1 and its extremely positive guidance for Q2, it is expected that the AI sector will gain a lot of interest. As BBAI, SOUN, and GFAI are relatively cheap AI stocks that have a history of running on sector-wide catalysts, they make the perfect candidates for investors wanting to ride on the AI wave at the moment.
If you have questions about AI stock and where it could be heading next feel free to reach out to us in our free alerts room!
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