What’s the most well-liked artificial intelligence (AI) stock within the marketplace directly? You could think it’s Nvidia (NASDAQ: NVDA). Regardless of every thing, the big chipmaker recently reported blowout fourth-quarter results and predicted the strong growth will proceed.
But there’s a minimum of 1 other AI stock that’s outperforming Nvidia to date in 2024: SoundHound AI (NASDAQ: SOUN). Shares of the conversational AI leader are up greater than 80% to date this 12 months. The company is scheduled to report its Q4 results later this week.
Must you purchase SoundHound AI stock before Thursday’s big announcement? Nvidia has.
Nvidia’s AI buying spree
SoundHound AI shareholders can thank Nvidia for the huge year-to-date gain. The stock was flailing until Nvidia submitted its 13F-HR filing to the U.S. Securities and Exchange Commission on Feb.14. That filing revealed that Nvidia had bought greater than 1.73 million shares of SoundHound AI.
To be sure, Nvidia’s investment in SoundHound amounted to pocket change for the huge GPU maker. There have been also 4 other AI stocks listed inside the regulatory filing, two of which were much larger purchases for Nvidia. Nonetheless, many investors saw Nvidia’s initiation of a position in SoundHound AI as something of an endorsement of the small company.
This wasn’t the first time that Nvidia invested in SoundHound AI. In 2017, Nvidia, along with several other investors, funded a $75 million capital raise for the small company when it was still privately held.
Why SoundHound AI is intriguing
I think SoundHound AI is without query an intriguing company. It has built a formidable customer base in recent times resulting from voice AI technology that’s arguably essentially the most effective available.
SoundHound AI has been especially successful inside the automotive industry. A “who’s who” of automakers use its AI platform, including Honda, Hyundai, Kia, and the Stellantis family of cars (Alfa Romeo, Chrysler, Citroen, Dodge, Fiat, Jeep, Opel, and Peugeot).
The company has also made significant inroads inside the restaurant market. Its partners include Beef O’Brady’s, Krispy Kreme, Oracle Food and Beverage, Toast, and White Castle.
SoundHound estimates its total addressable market at greater than $160 billion. Together with automotive and restaurant applications, the company is actively going after opportunities in entertainment and the Web of Things markets. It also hopes to give attention to financial services, healthcare, retail, and more.
The company is growing by leaps and bounds. Inside the third quarter of 2023, SoundHound AI’s revenue soared 19% 12 months over 12 months and 52% sequentially. It also achieved a sturdy gross margin of 73%.
Must you purchase SoundHound AI stock before Thursday?
SoundHound provided a big Q4 revenue guidance range in November of between $16 million and $20 million. The company also expects to generate positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in Q4. If SoundHound trounces the common analysts’ estimate of $17.75 million and achieves its EBITDA goal, its shares could take off.
So do you might have to purchase SoundHound AI stock before the company’s Q4 update on Thursday? I’d not go that far. Scrambling to buy SoundHound AI quickly in an attempt to rating an infinite gain on better-than-expected quarterly results is of enterprise.
Nonetheless, SoundHound does have a large long-term opportunity with its voice AI technology. It’s continuing to deliver solid growth. Within the event you’re an aggressive investor in search of an AI stock that continues to be small, I think that SoundHound AI is worthy of a serious look.
Must you invest $1,000 in SoundHound AI directly?
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Keith Speights has no position in any of the stocks mentioned. The Motley Idiot has positions in and recommends Nvidia and Toast. The Motley Idiot recommends Stellantis. The Motley Idiot has a disclosure policy.
Should You Buy SoundHound AI Stock Before Thursday’s Big Announcement? Nvidia Has. was originally published by The Motley Idiot