Artificial intelligence (AI) is a significant focus on Wall Street, rapidly expanding into everyday business applications. OpenAI's ChatGPT revolutionized search and queries, while Nvidia's growth significantly boosted the Nasdaq Composite and S&P 500. There are numerous investment opportunities within the AI sector, ranging from tech research firms like Gartner to software providers like Microsoft's Copilot and memory suppliers like Micron Technology. However, not every investor has the resources to diversify across all these options. For those with a few thousand dollars to invest, two contrasting companies are worth considering for long-term gains: SoundHound AI and Amazon. **SoundHound AI** Growing costs and staff shortages in the restaurant industry have led to increased interest in voice recognition technology, a niche where SoundHound AI excels. The company’s software is utilized by several well-known clients such as White Castle and Honda. Previously criticized for its financial position, SoundHound has revamped its situation, boosting its cash balance to $200 million and eliminating debt, despite a significant increase in share count. Currently trading at 26 times sales seems steep for a company with negative cash flow, but their rapid revenue growth—from $13. 5 million in Q2 with a 54% year-over-year increase to projected revenues of $150 million next year—lowers the price-to-sales ratio to 12. 5. Though investment in SoundHound carries risk given its size and market positioning, sectors such as voice-enabled devices and retail present considerable growth potential. **Amazon** In stark contrast, Amazon, valued at about 1, 000 times more than SoundHound, is integral to the AI landscape via its dominant cloud service, Amazon Web Services (AWS).

AWS is essential for powering data-heavy AI applications and accounted for nearly a third of the market. It also constitutes 18% of Amazon’s revenue, showcasing its growing importance. Amazon is increasingly transitioning from a product-based model to a services-oriented one, with 58% of its sales coming from services like AWS, digital ads, and Prime. This shift, combined with AWS’s operating margin of 36%, has significantly boosted profit margins. Additionally, Amazon is exploring AI further with initiatives like Amazon Bedrock and developing AI chips, positioning itself as a formidable player in the industry. Its stock trades below recent averages, presenting a potential investment opportunity. Investors should weigh their risk tolerance when deciding between these opportunities. SoundHound is riskier but may offer higher returns, while Amazon provides a more stable investment. A balanced approach might involve favoring an investment in Amazon with a smaller stake in SoundHound, depending on individual risk profiles.