Not too long ago, an article in The Wall Street Journal highlighted that Nvidia (NASDAQ: NVDA) held around 1.7 million shares of SoundHound AI (NASDAQ: SOUN), solidifying Nvidia’s influential role in the realm of artificial intelligence. Given this significant investment, it is advisable for investors to delve into SoundHound AI’s background before contemplating the acquisition of SOUN shares.
Prior to making any investment decisions, it is crucial to comprehend why SoundHound AI stands out from other companies focused on machine learning. Once investors familiarize themselves with SoundHound AI and witness the company’s growth trajectory, they will likely be inclined to consider a modest investment.
The Unique Proposition of SoundHound AI
While numerous companies concentrate on artificial intelligence, SoundHound AI distinguishes itself by specializing in conversational intelligence. The company’s primary focus lies in providing voice AI solutions that enable businesses to deliver exceptional conversational experiences to their clientele.
Keyvan Mohajer, the co-founder and CEO of SoundHound AI, elaborated on this concept in an interview with Yahoo! Finance. He emphasized that SoundHound AI plays a pivotal role in empowering various devices such as cars and TVs, servicing millions of customers across 10,000 locations with an additional 100,000 in the pipeline.
The strategic investment by Nvidia in SOUN stock aligns with SoundHound AI’s emergence as a frontrunner in AI-driven customer service solutions, akin to Nvidia’s dominance in AI graphics processing units.
SoundHound AI recently unveiled a voice assistant integrated with ChatGPT functionality tailored for automobiles, showcasing the company’s pioneering efforts in a potentially high-growth segment of the machine-learning market.
Impressive Quarterly Revenue Growth of SoundHound AI
While SoundHound AI’s presence spans 10,000 locations with a promising pipeline of 100,000 more, the pivotal question revolves around revenue expansion. The data unequivocally confirms substantial revenue growth for SoundHound AI.
In the fourth quarter of 2023, SoundHound AI achieved revenue of $17.1 million, marking an impressive 80% surge year over year. This robust financial performance underscores the company’s trajectory towards profitability. Notably, SoundHound AI reported a net earnings loss of 7 cents per share in Q4 2023, a notable improvement from the 15 cents per share loss in the corresponding period of the previous year.
Looking forward, SoundHound AI anticipates generating revenue between \(63 million to \)77 million for the full year 2024, with a revenue projection for 2025 surpassing \(100 million. This forecast indicates a rapid revenue escalation, considering that the company’s revenue for 2023 amounted to \)45.9 million.
SOUN Stock: Poised to Emerge as a Niche AI Success Story
Drawing parallels to Nvidia’s triumph in AI GPUs, SoundHound AI’s potential success in voice AI warrants serious consideration. The company’s specialization in a niche AI sector poised for rapid expansion, coupled with its robust revenue growth, positions it as a compelling investment opportunity.
The strategic investment by Nvidia in SoundHound AI underscores the company’s potential, prompting investors to meticulously research SoundHound AI before contemplating an investment in SOUN shares.
As of the publication date, David Moadel did not hold any positions (directly or indirectly) in the securities mentioned in this article. The opinions expressed are solely those of the author, in accordance with the guidelines of InvestorPlace.com.
David Moadel has contributed engaging content across various platforms such as Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and InvestorPlace.com, occasionally pushing the boundaries. Additionally, he serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel, Looking at the Markets.
