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In the years 2023 and 2024, generative artificial intelligence has surged like a tsunami, lifting companies high in its wake. Nvidia (NASDAQ:NVDA) stands tall as a key beneficiary, but SoundHound AI (NASDAQ:SOUN) has captivated onlookers with its potential. We assign SOUN stock a respectable “B” grade.
The market buzz surrounding Nvidia’s stellar fiscal report for the fourth quarter of 2024 is deafening. Yet, Nvidia isn’t the sole star in the AI constellation witnessing phenomenal revenue growth. For a comprehensive exposure to the AI market, investors are advised to consider both Nvidia and SoundHound AI.
A Noteworthy Backer Steps Forward for SoundHound AI
Within the domain of AI-related enterprises, Nvidia reigns as a potent force. Therefore, when Nvidia injects a hefty $3.7 billion into SoundHound AI, it speaks volumes. Prospective investors should take note of this significant backing from Nvidia.
What propels Nvidia to infuse such substantial capital into SoundHound AI? Perhaps Nvidia’s leadership perceives exponential growth potential within the specialized market that SoundHound AI caters to.
SoundHound AI’s CEO, Keyvan Mohajer, articulated in a recent interview that Nvidia lays the “infrastructure for AI” while SoundHound “puts that infrastructure to good use.” The symbiosis between the two entities is crystal clear.
This synergy paves the way for both Nvidia and SoundHound AI to scale greater heights in the burgeoning gen-AI landscape. SoundHound AI’s forte lies in AI-powered voice applications, which possess significant commercial utility for enhancing customer service.
This sector may, as of now, represent a largely untapped niche market. Mohajer highlighted a staggering “$100 billion opportunity” for SoundHound AI, as its products facilitate voice AI integration in various devices such as televisions, automotive systems, and beyond.
SoundHound AI’s Remarkable Revenue Surge
Avid investors are not merely enticed by prospective opportunities; they also seek concrete evidence of growth. SoundHound AI certainly does not fall short in this aspect, showcasing compelling data that underscores the bullish case for SOUN stock.
Similar to Nvidia, SoundHound AI demonstrates remarkable revenue escalation. Notably, in the fourth quarter of 2023, SoundHound AI witnessed an 80% year-over-year surge in revenue, reaching $17.1 million.
Additionally, SoundHound AI saw its gross margin expand by 6 percentage points year over year to 77%. This marked a stellar performance for the entirety of 2023, where the company’s gross margin soared by 6 percentage points yearly to hit 75%.
While SOUN stock is not presently awarded an “A” grade, there remains room for SoundHound AI to further solidify its financial standing. Naturally, observers anticipate SoundHound AI to report profitable quarters and years ahead.
Nevertheless, the net loss per share for SoundHound AI in the full year of 2023, amounting to 40 cents, is notably superior to the previous year’s figure of 74 cents per share.
SOUN Stock: A Fitting Complement in the AI Investment Portfolio
The meteoric rise of SoundHound AI shares in the current year suggests a promising trajectory. The upward trajectory might well persist through 2024 as corporations uncover the multifarious applications of gen-AI voice technology.
Investors need not feel obliged to opt for either SoundHound AI or Nvidia. It is entirely feasible to hold positions in both NVDA and SOUN stocks, even if Nvidia commands a more established foothold in the market. Moving ahead, we encourage vigilance in monitoring SoundHound AI’s evolution as an eminent, Nvidia-backed contender.
Disclaimer: On the date of publishing, Louis Navellier held a long position in NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The key researcher from the InvestorPlace team responsible for this content disclosed that they did not hold any positions (either directly or indirectly) in the securities referred to in this article.
