The market doesn't know what to make of Nvidia (NASDAQ: NVDA) stock right now

The market doesn't know what to make of Nvidia (NASDAQ: NVDA) stock right now. Its shares are down 30% so far this year, and analysts are trimming their growth forecasts

The market isn't sure what to make of Nvidia (NASDAQ:NVDA) stock. Its shares are down 30% so far this year, and analysts are trimming their growth forecasts for the chipmaker as its valuation slides. The graphics processing unit (GPU) leader now trades at just 18.4 times sales -- its cheapest multiple since early 2023.

Nvidia stock is arguably a great buy following the market's early 2025 correction. But if you're looking to load up on bargain artificial intelligence (AI) stocks, don't overlook the two lesser-known companies below. Each provides a unique way to invest in the AI space, and both have more growth potential than Nvidia.

If you're looking to amplify the upside potential in your portfolio by investing in AI stocks, consider Tiny SoundHound AI (NASDAQ:SOUN). There are some crucial risks to be aware of, but the company's growth potential is quickly becoming apparent.

With a market cap of only $3.3 billion, SoundHound is one of the smallest public companies that's heavily exposed to the AI revolution. It specializes in AI applications related to audible speech, such as automated drive-through windows and AI agents answering customer support phone calls. This segment should experience rapid growth: A recent report from market research company SNS Insider forecasts that the AI voice generator market -- valued at just $3.2 billion in 2023 -- will grow into a $40 billion market by 2032.

SoundHound's revenue hit a new record last quarter, rising 101% year over year to $34.5 million. The stock trades at 32.5 times sales, showing that the market has already priced in a lot of anticipated growth. But it's possible that the market still underestimates SoundHound's long-term growth potential. The AI revolution is just getting started, and its true potential likely far exceeds what most of us can imagine today.

Due in part to its current small size, SoundHound has plenty of upside potential. But that may also limit its ability to compete against the giants of big tech with their massive research and development budgets -- many of them are investing heavily in voice AI applications. Given the level of competition that is developing in this niche, SoundHound AI faces a lot of risk, and its valuation -- though it's down markedly from the peak it surged to in early January -- isn't obviously cheap. But when it comes to publicly traded AI companies with massive upside potential, SoundHound tops the list.

Looking for a stock with a little less risk but plenty of upside potential? Check out Palantir Technologies (NASDAQ:PLTR). While it's not a pure-play AI business, Palantir's future will largely be driven by its investments in AI. With a market cap of roughly $210 billion, Palantir is significantly larger than SoundHound, but it's still less than a tenth the size of Nvidia with its $2.4 trillion market cap.

Just this week, Palantir stock jumped on the news that NATO would be officially adopting its AI-driven military system. This is a giant vote of confidence for its offerings, and a sign that the company will have a leading role in the modernization of military systems and strategies around the globe.

Unfortunately for would-be new investors, Palantir stock is outrageously expensive, trading at 80.5 times sales. Even with sales growth expected to be around 30% annually in both 2025 and 2026, that's a steep premium. Nvidia, by comparison, trades at just 18.8 times sales, and its revenue growth rate is expected to be nearly twice as fast as Palantir's this year. From a profit standpoint, Nvidia looks even more attractive: Its shares trade at just 33.7 times trailing earnings and 22.4 times forward earnings -- significantly lower than Palantir's valuations.

Both SoundHound and Palantir have exciting potential, but from a valuation standpoint, it's hard to make the case that either is more attractive as a long-term investment than Nvidia right now. Opening small positions in each could be a great way to diversify your portfolio and expand your AI exposure, but that's no reason to pull away from Nvidia. Its relatively cheap valuation and dominant position in the market for AI GPUs continue to make it a wise core holding for any AI sector investor.