The artificial intelligence (AI) market is going like gangbusters as businesses and individuals flock to generative AI systems including Alphabet's Bard and OpenAI's ChatGPT platform. According to Bloomberg Intelligence, the generative AI market is "poised to explode" from a market size of just $40 billion in 2022 to $1.3 trillion by 2032.

How can you position your portfolio to take advantage of that? These two stocks are your best bets right now.

The pick-and-shovel play in AI

During the California gold rush of the 1800s, the majority of prospectors made little to no money, but the shopkeepers around them did quite well. Thus, the adage was born: "During a gold rush, sell shovels." If this strategy fits with your investment style, your AI bets must include Nvidia (NASDAQ: NVDA).

Right now, few companies are as important to the AI industry as Nvidia. It sells some of the most advanced GPUs (graphics processing units) on the market -- specialized chips capable of handling heavy computing loads through parallel processing. That's an essential capability for the servers that train and power AI models. Whether the use case is image recognition, natural language processing, or autonomous driving, AI systems require huge volumes of GPUs to function, and more will be needed to meet the growing demand for those AI services. According to various estimates, Nvidia is supplying between 70% and 95% of the world's AI chips.

Of course, other chipmakers are not ignoring Nvidia's success. As CEO Jensen Huang recently said, "I don't think people are trying to put me out of business. I probably know they're trying to, so that's different." Intel and AMD are aggressively expanding their chip manufacturing capabilities, while start-ups like D-Matrix aim to shake up the market with new components that dramatically reduce the computing load AI models require. As was the case during previous chip wars, it's far from certain which companies will win over the long term. Right now, however, Nvidia has a dominant lead. Any bet on the rise of AI should start with the company supplying its most critical components. But if you're looking for maximum upside, the stock below might be a better pick.

This voice recognition company's stock has even more upside

Nvidia is a great bet for those bullish on AI. But with a market cap north of $2.7 trillion, it's likely that the company's biggest days of growth are behind it. Looking for a company whose best days are ahead of it? Look no further than SoundHound AI (NASDAQ: SOUN).

Compared to Nvidia, SoundHound AI is tiny, with a market cap of just $1.7 billion. But with an addressable market that is already worth more than $140 billion, it has a clear pathway to grow immensely. However, there are some serious risks for investors to consider before jumping into its stock.

SoundHound's specialty is integrating AI into systems that can engage in verbal conversation with people. Its voice recognition and language processing technology is already in use across a variety of industries, allowing people to chat with their vehicles about maintenance issues or order fast food through an AI chatbot, for example. Major names like Hyundai and Applebee's are already SoundHound AI clients.

With a growing list of customers and a portfolio of more than 200 patents, SoundHound AI could be a major player in the artificial intelligence space this decade. Yet that naturally leads to the question of why its valuation is still stuck below $2 billion.

First, SoundHound AI may not have the capital necessary to compete with the tech giants that are also investing heavily in its niche. Its research and development budget of only $56 million per year, for example, is dwarfed by the budgets of competitors like IBM and Alphabet. So it's not clear if SoundHound's lead is sustainable.

Second, the company is still losing money. Last quarter, it posted its biggest loss in history. That will be less of a problem if additional capital remains cheap and accessible. But if the market turns its back on SoundHound, that would hinder its already limited ability to compete head-to-head with better-financed companies.

If SoundHound does succeed, there could be massive upside for patient shareholders. But there are major downside risks here as well. This is much more of a boom-or-bust investment than Nvidia, and is suitable only for aggressive investors seeking maximum upside.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Nvidia. The Motley Fool recommends International Business Machines. The Motley Fool has a disclosure policy.

2 Top Artificial Intelligence Stocks to Buy Right Now was originally published by The Motley Fool