NVIDIA Corp (NASDAQ:NVDA, ETR:NVD)'s recent disclosures regarding its investment strategy, including its historical ties with Arm Holdings PLC (NASDAQ:ARM) and its bullish investment in SoundHound, indicate the company's continued interest in expanding its portfolio and fostering innovation in AI technologies.
As of December 31, 2023, the company held approximately 1.73 million shares of SoundHound, valued at around $3.67 million.
Nvidia's involvement with SoundHound dates back to 2017 when it participated in a $75 million funding round aimed at supporting the company's international expansion and advancing its platform vision.
Analysts at Wedbush were excited by the disclosure.
“We view this as a positive indicator for the company as this investment now further solidifies the company's brand within the AI Revolution with the Godfather of AI Jensen and Nvidia now backing SoundHound,” Wedbush analysts wrote.
“(We) believe this could be the start of a broader investment into the company down the line which is a clear tailwind.”
SoundHound offers a range of products and solutions that utilize AI to enable voice-enabled interactions, music identification, and sound search capabilities. SoundHound's flagship product is the SoundHound app, which allows users to identify songs by simply humming or singing a melody. Additionally, SoundHound provides AI-driven voice assistant technology for automotive, consumer electronics, and enterprise applications, enabling hands-free voice commands and interactions in various devices and platforms.
SoundHound is capitalizing on the demand for AI technology surges with a surge in inbound leads. Notably, its Pillar 1 performance, catering to automotive, television, and IoT sectors, has garnered considerable attention, with automotive brands alone accounting for a quarter of global production units.
According to Wedbush, collaborations with industry giants like Stellantis in the EU and Hyundai in the USA underscore its prominence.
Moreover, its AI voice customer solutions, constituting Pillar 2, are gaining traction, with renowned franchises like Jersey Mike’s and Krispy Kreme joining its clientele.
With its robust technology offering expanding into various applications, SoundHound appears poised to seize a significant portion of the burgeoning AI chatbot market.
Wedbush has an Outperform rating and a $5 price target on SOUN stock which traded hands at $3.70 on Thursday afternoon.