Prediction: These Could Be the Next Tech Multibagger Stocks

Key Points

• SoundHound AI is set to double its revenue this year, and its huge revenue backlog should allow it to sustain its impressive growth in the long run.

• Micron Technology is winning a bigger share of a fast-growing niche in the semiconductor industry, resulting in outstanding growth in revenue and earnings.

• 10 stocks we like better than SoundHound AI ›

Buying and holding top technology stocks for the long run is a solid strategy to grow your wealth. That's because tech companies have the ability to deliver above-average returns thanks to their innovative and disruptive nature.

Some of the top technology companies today have delivered phenomenal returns in the past few years, becoming multibaggers in the process. The good part is that the wheels of innovation keep spinning, and artificial intelligence (AI) is the latest disruption that's supercharging the growth of several companies.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Here are two companies that have the potential to become multibaggers thanks to the proliferation of AI.

Image source: Getty Images.

1. SoundHound AI

SoundHound AI (NASDAQ: SOUN) is a small company right now with just over $131 million in trailing-12-month revenue, but it is growing rapidly on account of the fast-growing demand for voice AI solutions.

SoundHound's conversational AI platform enables customers to make voice AI agents, custom voice AI solutions, smart answering systems, and voice commerce solutions, among other things. Its offerings have quickly gained traction in several industries such as automotive, hospitality, and restaurants. The company has built a solid and diversified customer base already, with big names such as Stellantis, Samsung, Nvidia, and Pandora using its solutions.

Additionally, SoundHound has been making acquisitions to bolster its presence in the conversational AI market that's expected to clock a compound annual growth rate of almost 23% through 2032, generating $61 billion in revenue at the end of the forecast period. The company's latest acquisition is Interactions, a company that provides AI-powered voice assistants to customers that can be deployed for customer service applications.

SoundHound points out that this new acquisition, made for $60 million in cash, will unlock a new client base for the company, enabling it to create more cross-selling and up-selling opportunities. What's more, SoundHound is now sitting on almost 400 patents following its latest acquisition. This gives SoundHound a solid moat and a springboard to capitalize on the multibillion-dollar opportunity present in the conversational AI market.

Even better, SoundHound's solid balance sheet with $270 million in cash and no debt puts it in a nice position to keep pushing ahead. As such, it is easy to see why analysts are estimating solid growth in SoundHound's revenue going forward.

Data by YCharts.

However, the company's impressive backlog of $1.2 billion at the end of 2024 suggests that it could easily grow at a much faster pace. Of course, the stock is expensive right now with a sales multiple of 42. Investors, however, should note that it is on track to double its revenue in 2025, and it can sustain such terrific growth levels in the coming years thanks to the size of its backlog, its acquisitions, and the size of the end-market opportunity in conversational AI.

As such, SoundHound has the potential to become a much bigger company in the long run, and that's why it could turn out to be the next tech multibagger.

2. Micron Technology

Micron Technology (NASDAQ: MU) is another company that has solid room for growth in the long run, thanks to the AI-driven demand for memory chips that are used in multiple applications. The company produces dynamic random-access memory (DRAM) and NAND flash storage memory chips that go into data centers, computers, smartphones, and automotive applications.

This market is set for secular growth, generating an estimated $360 billion in revenue in 2029 at a compound annual growth rate of nearly 15%. Micron, however, is growing at a faster pace than the memory industry.

The company's revenue is projected to increase by 48% in the recently concluded fiscal year 2025 to $37 billion, followed by another solid jump of 31% next year. This outstanding growth seems sustainable for a long period, thanks to AI. That's because Micron is supplying its high-bandwidth memory (HBM) chips that are deployed in AI servers to all the key chipmakers benefiting from the proliferation of AI.

The HBM market is projected to generate a whopping $130 billion in revenue in 2033, growing at an annual rate of 42%, according to an analysis from Bloomberg Intelligence. At the same time, the growing memory demand from the personal computer, smartphone, and automotive markets will contribute to the industry's growth. Since Micron is achieving faster growth than the memory industry, it can be deduced that it is winning a bigger share of this space.

Analysts' growth estimates indicate that Micron could continue to win a bigger share of the global memory market. This could pave the way for years of terrific growth for the company. And given that it is trading at just 12 times forward earnings right now, the market could be encouraged to reward Micron with a premium valuation that could send its shares soaring in the future, potentially turning it into a multibagger.

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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.