Two AI Stocks to Buy on the Next Market Dip

The stock market has rebounded strongly in recent weeks, sending many AI stocks to new highs. As of June 27, the S&P 500 and Nasdaq Composite have gained 12.6% and 13.6%, respectively, over the last year. This surge has made some of the best artificial intelligence (AI) stocks a bit pricey. However, these high-flying stocks could present excellent buying opportunities during the next market dip. Two top candidates to watch are SoundHound AI (SOUN) and Micron Technology (MU).

SoundHound AI's Big Promises and Why I'm Waiting for a Sale

SoundHound AI has been a standout in the AI voice-control market for years. The company's AI-based voice interpretation tools have evolved from early smartphone applications to a wide range of industries, including in-car controls, phone-based menu systems, drive-through windows, and data center operations. SoundHound AI's client list includes many top consumer electronics and car brands, and its billion-dollar order backlog is starting to convert into actual revenues.

However, I'm not ready to recommend this stock just yet. SoundHound AI's shares experienced artificial gains in a meme-stock moment in late 2024, and while the stock is up 155% over the last 52 weeks, it still looks expensive. For a buy recommendation, one of two things must happen:

• The company could publish dramatically stronger financials, which is likely given its substantial order backlog.
• The stock could take another haircut, either gradually as the meme stock mania fades or quickly during a broader market downturn.

I'm willing to wait for SoundHound AI's business plan to gain traction, and I'll be ready to buy the next time high-priced growth stocks take a hit.

The Art of Waiting for a Better Price on Micron Technology

Micron Technology, a memory chip giant, has seen its stock skyrocket since April's tariff-based market dip. Despite the 95% surge from April's low, the stock remains reasonably valued at 22.8 times trailing earnings or 4.2 times sales. So, why wait for another market correction?

Micron operates in a cyclical industry, tied to shifts in the smartphone, data center, and PC markets. Historically, investors have made significant profits by buying low during downturns. While Micron benefits from the AI boom through its partnership with Nvidia, which uses Micron's high-bandwidth memory in its Blackwell cards, I'm more comfortable waiting for a better price.

Whether due to inflation fears or memory-chip price wars, another buying window will likely open up in the next year or two. For now, I'm content with my existing Micron holdings and will save most of my cash for the next market dip.

Your approach may vary, but saving cash for a rainy day around Micron's Idaho headquarters could be a smart strategy.