What is the hottest synthetic intelligence (AI) inventory in the marketplace proper now? You may suppose it is Nvidia (NASDAQ: NVDA). In any case, the large chipmaker just lately reported blowout fourth-quarter outcomes and predicted the robust progress will proceed.
However there’s a minimum of one different AI inventory that’s outperforming Nvidia up to now in 2024: SoundHound AI (NASDAQ: SOUN). Shares of the conversational AI chief are up greater than 80% up to now this yr. The corporate is scheduled to report its This fall outcomes later this week.
Must you purchase SoundHound AI inventory earlier than Thursday’s massive announcement? Nvidia has.
Nvidia’s AI shopping for spree
SoundHound AI shareholders can thank Nvidia for the massive year-to-date achieve. The inventory was flailing till Nvidia submitted its 13F-HR submitting to the U.S. Securities and Trade Fee on Feb.14. That submitting revealed that Nvidia had purchased greater than 1.73 million shares of SoundHound AI.
To make certain, Nvidia’s funding in SoundHound amounted to pocket change for the massive GPU maker. There have been additionally 4 different AI shares listed within the regulatory submitting, two of which have been a lot larger purchases for Nvidia. Nevertheless, many buyers noticed Nvidia’s initiation of a place in SoundHound AI as one thing of an endorsement of the small firm.
This wasn’t the primary time that Nvidia invested in SoundHound AI. In 2017, Nvidia, together with a number of different buyers, funded a $75 million capital increase for the small firm when it was nonetheless privately held.
Why SoundHound AI is intriguing
I believe SoundHound AI is with out query an intriguing firm. It has constructed a formidable buyer base in recent times due to voice AI expertise that’s arguably the most effective out there.
SoundHound AI has been particularly profitable within the automotive business. A “who’s who” of automakers use its AI platform, together with Honda, Hyundai, Kia, and the Stellantis household of automobiles (Alfa Romeo, Chrysler, Citroen, Dodge, Fiat, Jeep, Opel, and Peugeot).
The corporate has additionally made important inroads within the restaurant market. Its companions embody Beef O’Brady’s, Krispy Kreme, Oracle Meals and Beverage, Toast, and White Fortress.
SoundHound estimates its complete addressable market at greater than $160 billion. Along with automotive and restaurant purposes, the corporate is actively going after alternatives in leisure and the Web of Issues markets. It additionally hopes to focus on monetary providers, healthcare, retail, and extra.
The corporate is rising by leaps and bounds. Within the third quarter of 2023, SoundHound AI’s income soared 19% yr over yr and 52% sequentially. It additionally achieved a powerful gross margin of 73%.
Must you purchase SoundHound AI inventory earlier than Thursday?
SoundHound offered a large This fall income steerage vary in November of between $16 million and $20 million. The corporate additionally expects to generate constructive adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) in This fall. If SoundHound trounces the typical analysts’ estimate of $17.75 million and achieves its EBITDA objective, its shares might take off.
So must you purchase SoundHound AI inventory earlier than the corporate’s This fall replace on Thursday? I would not go that far. Scrambling to purchase SoundHound AI shortly in an try to attain an enormous achieve on better-than-expected quarterly outcomes is a bet.
However, SoundHound does have an enormous long-term alternative with its voice AI expertise. It is persevering with to ship strong progress. For those who’re an aggressive investor searching for an AI inventory that is nonetheless small, I believe that SoundHound AI is worthy of a critical look.
Must you make investments $1,000 in SoundHound AI proper now?
Before you purchase inventory in SoundHound AI, contemplate this:
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Keith Speights has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Nvidia and Toast. The Motley Idiot recommends Stellantis. The Motley Idiot has a disclosure coverage.
Ought to You Purchase SoundHound AI Inventory Earlier than Thursday’s Large Announcement? Nvidia Has. was initially revealed by The Motley Idiot