With the artificial intelligence boom gaining momentum, we’re likely to see far more acquisitions for some of the top AI stocks to watch. For one, AI behemoths like Nvidia (NASDAQ:NVDA), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), and Microsoft (NASDAQ:MSFT) are exploring new ways to innovate, stay ultra-competitive, and ramp up revenue.
Two, according to International Data Corporation, spending on AI technologies is expected to balloon to about $154 billion this year – a nearly 27% jump year over year. By 2026, spending could reach $300 billion. All thanks to increased demand for AI-powered solutions across multiple industries.
Better, there’s no shortage of M&A interest. In 2022, Google acquired AI avatar startup Alter. Accenture (NYSE:ACN) acquired industrial AI company, Flutura. McKinsey acquired Iguazio, a leader in AI and machine learning. Amazon acquired Snackable AI to boost its podcast features.
Snowflake acquired Myst AI for its time series forecasting. Even BioNTech (NASDAQ:BNTX) acquired AI startup InstaDeep for about $683 million to help with drug discovery and development.
While I could go on, let’s look at other potential acquisition targets.
AI Stocks to Watch: SoundHound AI (SOUN)
One of the top AI stocks to watch is SoundHound AI (NASDAQ:SOUN). The last time I mentioned SOUN, it traded at $3 on June 12. Today, after hitting a high of $4.44, it trades at $3.66. And I still believe it could see higher highs. All thanks to what the company called “an incredible surge in demand for conversational AI.”
We also have to consider the company is working to integrate voice assistants into vehicles and restaurants, both of which could bring in more than $500 million a year for the company.
In short, we’re talking about a massive opportunity here. Even better, Cantor Fitzgerald analyst Brett Knoblauch more than doubled his price target on SOUN to $6.20 from $2.80, with an overweight rating. He also noted, “SoundHound is one of the few companies that can take advantage of the AI frenzy currently occurring at every business across the globe.”
Predictive Oncology (POAI)
Another potential acquisition target could be Predictive Oncology (NASDAQ:POAI). In fact, with its PEDAL platform, the company can “efficiently challenge a compound to demonstrate drug response within a set of heterogeneous tumor samples representing what the compound would encounter in a clinical trial. Thus, providing a leading indicator of clinical performance,” as noted by the company’s Chief Business Officer, Pamela Bush, Ph.D., MBA, in a recent press release.
While the company doesn’t make a lot of money just yet, it does have key partnerships. For example, it’s working with Cancer Research Horizons to develop oncology drugs. With about $370 million of annual research spending, CRH is one of the biggest private funders of cancer research. It also announced a partnership with Cvergenx to develop a genomics-based approach to precision radiation therapy and drug discovery using artificial intelligence.
AI Stocks to Watch: Innodata (INOD)
The last time I mentioned Innodata (NASDAQ:INOD), it traded at around $7 on Feb. 27. These days, after hitting a high of $14.22, it did pull back to $10.50. But I think this one is heading higher, too. For one, the company just started generative AI development with a leading cloud infrastructure company, which also happens to be an existing customer.
According to Jack Abuhoff, Innodata CEO, “We anticipate potentially exceeding $8 million or more in total revenue with this customer in 2023. The other two generative AI deals we referred to in our earnings release are continuing to track positively. These are with two other Big Five global technology companies, each of which would be a new Innodata customer.”
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.