SoundHound AI Inc (NASDAQ: SOUN) earnings this morning reminded investors that it’s more than just an AI firm that once received a vote of confidence from Nvidia Corp (NASDAQ: NVDA).
On Friday, the company based out of Santa Clara, CA said its revenue more than doubled in the fourth quarter, leading to a 20% increase in its stock price.
SOUN also raised its guidance for the full year today, suggesting the future remains bright with or without the Nvidia investment.
For the year, SoundHound stock is still down close to 50%.
Why Nvidia investment wasn’t significant for SOUN anymore
SoundHound shares tanked nearly 30% on February 14 following Nvidia’s announcement that it’s no longer invested in the voice AI platform.
However, the price action may have been an overreaction on the investors’ part.
That’s because NVDA investment in SOUN was merely a financial one.
In the fourth quarter of 2023, when the AI darling first announced a stake in SoundHound, it was meaningful for the latter since it brought attention and credibility to its stock.
But it didn’t eventually result in substantial direct support or partnership with Nvidia, which means operationally, the investment hardly bore any benefit for SoundHound.
The Nasdaq-listed firm continues to do well without Nvidia, and the demand for its products remains just as strong, indicating that the NVDA-driven sell-off in SoundHound stock may be an opportunity to buy.
SoundHound continues to attract solid demand from QSR
SoundHound now sees its revenue falling between $157 million and $177 million in 2025.
Its previous guidance was for $175 million at the top end of the range.
The voice AI platform continues to attract solid demand from quick-service restaurants.
It has even teamed up with a few notable names recently, including Peet’s Coffee and Burger King UK.
“The pace of adoption of our customer service in restaurants is increasing,” the company’s chief executive Keyvan Mohajer told investors on the earnings call, adding SOUN is “already the largest provider with dozens of prominent brands and well over 10,000 locations.”
SoundHound stock does not, however, pay a dividend at writing.
What else could drive SoundHound stock price up in 2025?
SoundHound sees the DeepSeek development as a tailwind since an increase in AI models could lower its costs.
The artificial intelligence company is committed to bringing its technology “on the edge”, which could help unlock significant further upside in its share price as well.
SOUN chief executive Keyvan Mohajer is also bullish on the company’s in-vehicle voice assistant that “delivers new leads, and creates a monetizable moment for SoundHound with revenue sharing opportunities for carmakers.”
Despite recent turmoil, Wall Street remains bullish on SoundHound shares.
The consensus rating currently sits at “overweight” with analysts calling for upside to over $15 on average in the AI stock.
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