From Nasdaq: 2024-04-26 15:54:00

Shares of AI-related stocks Arm Holdings (NASDAQ: ARM), SoundHound AI (NASDAQ: SOUN), and Bigbear.ai (NYSE: BBAI) surged this week by 15.4%, 21.7%, and 22.8% respectively. Positive commentary from tech giants boosted enthusiasm for speculative AI stocks post sell-off. Sticky inflation and rising interest rates hit highly valued AI names prior to earnings season.

After a month-long decline, the three AI stocks experienced a rebound assisted by strong earnings commentary from Meta Platforms, Microsoft, and Alphabet. Meta increased its forecast for capital expenditures, while Microsoft and Alphabet beat Q1 expectations with accelerated cloud revenue growth. Both companies recorded substantial increases in capital expenditures related to AI investment.

Although Arm is the only company directly impacted by the increased spending, accelerating cloud revenue and massive capex increases depict a positive outlook for AI applications. SoundHound and Bigbear.ai, high-risk AI plays with potential upside, could benefit from the AI tailwinds. Arm has multibagger potential, while SoundHound and Bigbear.ai are smaller companies with growth opportunities despite current losses.



Read more at Nasdaq: Why Arm Holdings, SoundHound AI, and Bigbear.ai Holdings Rallied This Week