Nvidia, the world’s largest semiconductor company, has recently made investments in various other AI companies. One of these companies is SoundHound AI, which saw its stock soar 67% on the day Nvidia’s investment was revealed. With SoundHound’s innovative voice-based AI technologies and potential for creating substantial value, investors may want to consider following Nvidia’s lead and buying SoundHound AI stock.
SoundHound AI is a leader in conversational AI, focusing on developing technologies that can recognize voice-based prompts and respond accordingly. Its technology is designed to process speech in a way similar to the human brain. Already, some of the world’s largest companies, including restaurant chains like Jersey Mike’s, White Castle, and Krispy Kreme, have adopted SoundHound’s AI for various applications such as answering phones, automating drive-thru orders, and assisting employees with routine tasks.
In addition to the restaurant industry, SoundHound has also partnered with restaurant technology providers like Square, Toast, and Olo, integrating its conversational AI into point-of-sale and ordering systems. This has allowed SoundHound to rapidly expand into tens of thousands of new locations.
Automotive giants like Hyundai, Kia, and Stellantis are also utilizing SoundHound’s technology to create highly sophisticated in-car voice assistants. These voice assistants can help drivers navigate vehicle features and provide information on weather, sports results, and local restaurant availability.
SoundHound’s financial results for the fourth quarter and full-year 2023 are expected to show significant growth. Analysts are forecasting $46.5 million in total revenue for the year, representing a 49% increase compared to 2022. Additionally, SoundHound has a large order backlog of $341.7 million as of September 30, which is expected to convert into revenue over time.
Nvidia’s recent investment in SoundHound AI, along with its investments in other AI companies like Arm Holdings and Recursion Pharmaceuticals, highlights the chip giant’s interest in the AI industry. Although Nvidia’s $6.5 million position in SoundHound doesn’t provide a clear insight into the company’s future potential, it does indicate that Nvidia sees value in SoundHound amidst a growing field of AI opportunities.
However, investing in SoundHound AI stock does come with risks. The company was on the verge of running out of money just a year ago before securing a $125 million loan facility. While SoundHound continues to lose money, the cash infusion should sustain the company for at least the next 12 months. The stock is also highly volatile, with a wide spread between its 52-week low and high.
Despite the risks, SoundHound’s strong customer base and order backlog suggest promising revenue growth in the coming years. Investors may consider taking a small position in SoundHound AI stock, but they should be prepared for a volatile ride.
In conclusion, Nvidia’s investment in SoundHound AI and other AI companies highlights the potential in the AI industry. SoundHound’s conversational AI technologies and impressive customer base make it an attractive investment opportunity. However, investors should carefully evaluate the risks associated with SoundHound AI stock before making any decisions.
