2 Hot Growth Stocks to Buy in 2024 and Beyond

The stock market may have witnessed some volatility of late, but it is worth noting that S&P 500 the index has posted healthy gains of 41% since the start of 2023. This is due to solid growth in technology stocks, which has outperformed the broader market, thanks to catalysts such as artificial intelligence (AI).

This explains why the technological charge Nasdaq-100 Technology Sector the index has outperformed the S&P 500 since the start of 2023, with gains of a staggering 74%. The ability of technology companies to capitalize on disruptive trends over time, such as the Internet, smartphones, video streaming, social media, and now AI, is why companies in this sector tend to deliver huge gains.

This is why investors would do well to buy shares of Nvidia (NVDA 1.40%) and SoundHound AI (SOUND 0.40%) in 2024 as both companies take advantage of AI adoption in their respective industries and could prove to be the highest growth stocks in the long term. Shares of Nvidia and SoundHound are already up 135% so far this year, and a closer look at their outlook will tell us that their run could be here to stay.

Nvidia’s AI-fueled rally is likely to gain momentum

While Nvidia has been in good form in the stock market this year, it has seen a slight pullback of late. That could all change later this month, however, when the semiconductor giant releases its second-quarter results for fiscal 2025.

Nvidia is due to release its next set of quarterly results on August 28. Analysts expect the company to post revenue of $28.5 billion, which is slightly higher than the chip maker’s forecast of $28 billion. Its earnings are expected to more than double to $0.64 per share from $0.27 per share in the same quarter last year.

It won’t be surprising to see Nvidia beat Wall Street forecasts again — just as it has for the past four quarters — because of its dominant position in the AI ​​chip market.

The company has seen tremendous demand for its AI graphics processing units (GPUs), fueling growth in Nvidia’s data center business. In the first quarter of fiscal 2025 (which ended April 28), Nvidia’s data center revenue rose 427% year over year to $22.6 billion. Its total revenue rose 262% year over year to $26 billion.

Nvidia’s tremendous data center growth is likely to continue into the fiscal second quarter and beyond, despite recent rumors that its next-generation Blackwell chips could face a four-to-six-week delay before entering production. This is because Nvidia is witnessing strong demand for its existing H100 and H200 processors.

CFO Colette Kress noted on Nvidia’s May earnings conference call that the company continued to increase supply of its previous flagship processor, the H100, despite the availability of a new chip such as the H200. At the same time, Nvidia is having trouble meeting demand for the H200, and the chip is expected to remain in limited supply next year.

As for the company’s new generation of Blackwell processors, sources suggest that Nvidia could generate a whopping $210 billion in revenue from their sales next year. That would be a huge increase from the $47.5 billion in data center revenue the company generated in fiscal 2024. All of which explains why analysts expect Nvidia’s revenue to nearly double in the year fiscal 2025 (which ends next January) to $120.5 billion, up from $60.9. billion in fiscal year 2024.

Also, as the following chart shows, analysts have raised their growth expectations for Nvidia over the next two fiscal years as well.

NVDA revenue estimates for current fiscal year data by YCharts.

All of this indicates that Nvidia could continue to be a top growth stock in 2024 and beyond, making it an ideal bet for growth-oriented investors looking to take advantage of the rapidly growing adoption of AI.

SoundHound AI is gaining traction in a rapidly growing AI niche

SoundHound AI provides customers with a platform to help them develop AI voice solutions such as chatbots and conversational voice assistants. The company believes its total addressable market (TAM) could be worth $140 billion, and the bright side is that it is well on its way to capitalizing on that opportunity.

The company reported an impressive year-over-year growth of 54% in Q2 2024 revenue to $13.5 million. SoundHound AI also acquired enterprise AI software company Amelia for $80 million so it can expand its reach into the AI-powered generative customer service space. SoundHound says that after the acquisition, it will serve 200 prominent customers worldwide, including leading banks and Fortune 500 companies.

Thanks to this acquisition and SoundHound’s growing presence in the restaurant and automotive markets, the company raised its 2024 revenue estimates to at least $80 million, up from a previous estimate of $71 million. Additionally, SoundHound expects revenue to grow again at a tremendous pace in 2025 and exceed $150 million.

SoundHound’s 2024 revenue guidance indicates that its top line is on track to grow 74% this year, which would be an improvement over 2023 revenue growth of 47%. Even better, guidance for 2025 indicates that the company expects to deliver 87% top-line growth next year.

We’ve already seen that SoundHound sees a massive addressable market for its AI voice solutions, so there’s a good chance it can sustain its remarkable growth in the long term. So investors looking to buy a growth stock right now can consider adding SoundHound to their portfolios. Its stock has started to take off after its latest results, and based on the company’s outlook, it could continue to go higher.