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In 2023 and 2024, rising tides will lift the generative artificial intelligence boat. Nvidia (NASDAQ:NVDA) is the obvious beneficiary, but Soundhound AI (NASDAQ:early clouds) stocks are attracting people’s attention.
You may have heard about Nvidia’s fiscal 2024 Q4 financial report debacle. Nvidia isn’t the only AI company experiencing impressive revenue growth. For balanced AI market exposure, invest in both Nvidia and SoundHound AI.
Famous companies invest in SoundHound AI
Nvidia is the kingmaker of AI companies, so it makes a lot of sense for Nvidia to invest in AI companies. Prospective shareholders will want to know that Nvidia invested his $3.7 million in SoundHound AI.
Why is Nvidia pouring so much money into SoundHound AI? Perhaps Nvidia executives envision strong growth in the niche markets SoundHound AI serves.
SoundHound AI CEO Keyvan Mohajer recently explained in an interview that while Nvidia is creating the “infrastructure for AI,” SoundHound is “leveraging that infrastructure.” Therefore, the synergy is very clear. ”
This synergy means there is room for both Nvidia and SoundHound AI to further ride the gen-AI trend. SoundHound AI specializes in AI-powered voice software that businesses can use for customer service.
This could be a largely untapped niche market. Mohajer said there is a “$100 billion opportunity” for SoundHound AI’s products to enable voice AI capabilities in televisions, other devices, and even cars.
SoundHound AI’s revenue growth is undeniable
Still, discerning investors don’t just want to see opportunities. They also want to improve hard data. As it turns out, SoundHound AI has data to back up his bullish thesis on SOUN stock.
Like Nvidia, SoundHound AI is also growing revenue. Specifically, SoundHound AI’s revenue for Q4 2023 was up 80% year over year to his $17.1 million.
Additionally, SoundHound AI’s gross margin improved 6 percentage points year over year to 77%. This resulted in SoundHound AI’s gross margin increasing 6 percentage points year-over-year to 75%, capping off an excellent full-year 2023 performance.
While SoundHound still has room to improve its fundamentals, its full-year 2023 net loss of 40 cents per share is certainly better than the company’s 74 cents per share net loss from 2022.
SOUN stock could be a valuable add-on AI investment
SoundHound AI stock has rapidly increased in value this year. This upward momentum is likely to continue through his 2024 as companies discover many use cases for gen-AI voice software.
This does not mean investors have to choose SoundHound AI or Nvidia. It is entirely possible for him to own both NVDA stock and SOUN stock, even though Nvidia is a more established company. Going forward, we’ll have to keep an eye on SoundHound AI’s progress as a hot start-up backed by Nvidia.
On the date of publication, David Mordell did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing Guidelines.
