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By now, the AI revolution is no secret to Wall Street. However, two under-the-radar, pure play AI stocks may offer asymmetric reward-to-risk. In addition, these two up-and-comers have recently inked deals with AI juggernauts, offering a massive catalyst. Below are the two highest-impact AI partnerships.

BigBear.ai (BBAI - Free Report) & Palantir (PLTR - Free Report)

BigBear.ai and Palantir both offer decision intelligence solutions spanning national security, digital identity, supply chains and logistics, enterprise operations, and integration of manned-unmanned teaming within autonomous systems. On Feb. 28, BigBear.ai and Palantir announced a strategic partnership combining AI-powered products with a next-generation operating platform. The partnership is a big deal for BigBear.ai for two reasons:

1. BigBear.ai has a market cap of just $600 million, while Palantir has a market cap of $54 billion. With Palantir as a partner, BigBear.ai has an opportunity to throw gasoline on their growth.
2. Palantir is the undisputed leader in this niche space. If Palantir finds value in BigBear.ai's offering, it proves the quality of BigBear.ai's product suite. Also, Palantir may look to acquire the company down the line, should it be necessary.

Swing to Profitably

Nvidia and Super Micro Computer (SMCI - Free Report) have proven how much demand there is for the AI industry. However, few pure plays exist, and even fewer profitable ones. Last quarter, BigBear.ai posted its first profitable quarter as a public company.

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Wall Street is Bullish

Zacks Consensus Estimates suggest healthy EPS growth of 64.21% in 2024.

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BigBear.ai is also gaining momentum from an EPS expectations perspective. Last quarter, the company beat analysts’ expectations by 142.86%.

Accumulation Patterns

On Feb. 27, shares jumped 38% on volume 10x the norm. The news was not apparent, but such heavy volume and price momentum indicate massive accumulation. The stock also forms a bullish and potentially explosive high-tight flag pattern.

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SoundHound AI (SOUN - Free Report) & Nvidia (NVDA - Free Report)

SoundHound AI is a technology company that specializes in audio and voice recognition. One of its prominent products is the SoundHound app, which allows users to identify songs by listening to a snippet of music. Users can hum, sing, or type lyrics into the app, and it provides information about the song title, artist, and album.

SoundHound's technology extends beyond music identification, incorporating voice-enabled AI solutions for various applications, including voice-controlled virtual assistants and integration into smart devices.

Why is the Nvidia Investment Impactful?

Until now, Nvidia has been selling the “picks and shovels” to the AI revolution. However, Nvidia's first 13F filing shows the company stepped out of its wheelhouse to purchase nearly $4 million worth of SoundHound, showing the company also has ambitions for AI pure plays.

Also, now that Nvidia has the third largest market cap in the U.S., the company has plenty of cash to add exposure to their investment down the line – likely to keep a bid under SoundHound shares.

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Bullish EPS Surprise History

Though SoundHound has only been public since early 2022, the company has exhibited a strong tendency to beat Wall Street analysts’ expectations. SoundHound has bested Zacks EPS Estimates in six of its first eight quarters.

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