SoundHound AI Emerges as Hidden Gem, Poised for Explosive Growth in the AI Industry
When it comes to artificial intelligence (AI), companies like Nvidia, Microsoft, and Amazon often dominate the conversation. However, there are smaller players in the market that are also making significant strides in this emerging industry. One such company is SoundHound AI.
SoundHound AI may be a relatively small enterprise with a valuation of just $430 million, but it has managed to secure partnerships with some of the world’s biggest corporations. This has allowed the company to fly under the radar for many investors, presenting a unique opportunity for those looking to capitalize on the AI industry’s growth.
Although only five analysts currently cover SoundHound stock, they are overwhelmingly bullish, with an average price target suggesting a massive 152% upside from the current trading price. So, why should investors pay attention to this hidden gem?
While most people are familiar with text-based AI chatbots, SoundHound specializes in voice AI technology that can process speech just like the human brain. The company has developed AI voice solutions for various industries, including the restaurant and automotive sectors. SoundHound’s technologies are being used in thousands of restaurants, where they offer automated drive-thru platforms, phone ordering solutions, and automated systems for dine-in customers. These solutions not only reduce costs for restaurants by streamlining operations but also have the potential to increase spending by up to 30%.
SoundHound has also made significant headway in the automotive industry by partnering with leading manufacturers like Mercedes-Benz and Hyundai. The company’s in-car voice assistant combines its own AI models with OpenAI’s ChatGPT to provide drivers with a wealth of knowledge, including weather updates, stock market information, local restaurant recommendations, and flight details.
While SoundHound’s quarterly revenue may be inconsistent due to its early-stage commercialization, the company generated $13.2 million in sales in the third quarter of 2023, representing a 19% year-over-year increase and a substantial 52% increase compared to the previous quarter.
Moreover, SoundHound currently has an order backlog worth a staggering $341.7 million, indicating a strong demand for its ready-made AI solutions. As businesses discover more use cases for AI, SoundHound is well-positioned to capitalize on this growing market, which is estimated to be worth $160 billion by 2026.
In terms of financial performance, SoundHound is actively working to improve its net losses. In the third quarter, the company’s net loss of $20.2 million marked a significant 33% reduction compared to the same period the previous year. This indicates a shift towards a healthier bottom line and a more sustainable growth strategy.
While SoundHound’s stock may be volatile, with a 52-week range from $0.93 to $5.11, the company’s major opportunities and ongoing partnerships with top-tier customers suggest a promising future. However, potential investors should be aware of the risks associated with investing in a volatile stock and should carefully consider their risk appetite when making investment decisions.
In conclusion, SoundHound AI is an emerging player in the AI industry that has managed to secure partnerships with leading companies across various sectors. With an array of voice AI solutions tailored for restaurants and automotive brands, SoundHound has positioned itself for significant growth. Despite its volatile stock performance, the company’s substantial order backlog and strong demand for AI solutions present an exciting opportunity for investors seeking exposure to the burgeoning AI market.