2 Artificial Intelligence (AI) Stocks I'm Buying If the Market Crashes

I don't know where the stock market is going in 2025. Wall Street has been an unpredictable place lately -- and short-term market trends are coin-flip bets in the best of times.

But I do know that a couple of artificial intelligence (AI) investments look ready for a price correction right now. And I wouldn't mind holding them for the long haul.

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Their business prospects are great in the long run, and the stocks should serve my portfolio nicely even if I pick them up at inflated share prices. Still, I'd much rather wait for the next market retreat from high-flying growth stocks. These top-notch AI experts may look good now, but they'd be even better ideas at a lower price.

Will the next bear market start in 2025? I'm not sure, but I want to pounce on these ideas if and when it happens.

Nvidia: The pricey king of AI hardware

Semiconductor designer Nvidia (NASDAQ: NVDA) has made a lot of investors very happy in recent years. Formerly known as a gaming hardware specialist with a side gig in large-scale number-crunching chips, Nvidia emerged as the leading provider of AI accelerator equipment in 2022. Its accelerators were used to train OpenAI's ChatGPT 3 system, which opened the doors for the AI boom that still feels fresh and game-changing in 2025.

The stock market was quick to embrace Nvidia's newfound AI success. Share prices soared more than 800% higher over the first two years of the ChatGPT era. The bullish move was more than empty speculation, too: Nvidia quadrupled its annual revenues over the same period, while free cash flows surged 1,380% higher.

So Nvidia's business is booming, and many investors expect its AI dominance to continue for many years. The stock price has dropped back roughly 10% from February's all-time highs, but it's still a big winner from a long-term perspective.

Image source: Getty Images.

And Nvidia's stock is still priced for perfection. It trades at 25 times trailing sales and 54 times free cash flows. That's a lot, even for a fast-growing tech titan.

All of this would be fine if Nvidia stood alone and unchallenged on this lofty hill, but that's not the situation at all. Longtime rival Advanced Micro Devices (NASDAQ: AMD) stands out as a threat to Nvidia's AI dominance. Its Instinct series of AI accelerators is often comparable to Nvidia's latest and greatest AI chips, especially when you include AMD's lower pricing in the calculation.

Other potential challengers to Nvidia's most lucrative AI deals include AI-service leaders such as Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN) Web Services (AWS). Yes, the largest-volume AI chip buyers have developed their own hardware in order to cut costs while satisfying very specific performance targets or feature sets.

So I'm afraid that Nvidia's stock may be overvalued right now, despite the company's proven success and incredible long-term prospects. I might consider buying Nvidia stock again if the stock price steps down by another 20% to 30%. Wake me up if a broad de-risking of Wall Street takes Nvidia's price down to approximately $100 per share. Even that would be a stretch -- I'm just setting loose limits for reconsidering my Nvidia view.

Until then, I'd rather keep my money on the sidelines.

SoundHound AI: Big dreams, big risks, expensive shares

If you agree that Nvidia's stock might be overpriced, you ain't seen nothing yet. SoundHound AI (NASDAQ: SOUN) makes AI's shares look affordable.

The AI services pioneer is unprofitable, and the stock trades at 44 times sales. However, the company's high-quality interface between the human voice and automated computer systems could be the next big thing in Next Big Things(tm), if you know what I mean.

The company is off to a great start. The recent first-quarter earnings report showed SoundHound AI's revenues surging 151% above the year-ago period. Management expects full-year sales to reach approximately $167 million in 2025, nearly doubling last year's $85.7 million.

Early clients included automaker Stellantis and digital media veteran Pandora, now a division of Sirius XM Holdings. Over the last three years, SoundHound AI's market expansion accelerated with new names such as digital payments giant Block, Mexican food specialist Chipotle Mexican Grill, and home electronics leader LG. I'm just scratching the surface of SoundHound AI's rich customer list, and the voice-driven services have started to roll out on a global scale -- one SoundHound AI client at a time.

It's a diverse list of partners. You can find SoundHound AI's voice-driven services at local drive-thru windows, in customer service phone menus, and interactions with your favorite smart home gadgets. If that sounds like a huge market opportunity, you'll understand why I'm excited about SoundHound AI's long-term future.

At the same time, you've seen the ultra-expensive stock. SoundHound AI may be the best name in the voice controls business, but it's far from the only option, and many of its potential rivals are tech titans like Alphabet or Amazon. SoundHound AI's success is not guaranteed, and the stock price should reflect a significant risk-based discount.

It's been four months since I said SoundHound AI would look like a buy at $7 per share. Not much has changed since then. SoundHound AI's stock is down 20% from the middle of January, but the current $11 price remains far above my $7 starting-price target.

Like Nvidia, SoundHound AI should be sensitive to marketwide risk adjustments. The next sustained downturn could be just what my price-sensitive stock-picking fingers are looking for. Until then, I'm just holding the shares I already own.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Anders Bylund has positions in Alphabet, Amazon, Nvidia, and SoundHound AI. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Block, Chipotle Mexican Grill, and Nvidia. The Motley Fool recommends Stellantis and recommends the following options: short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.