Nvidia Bought 5 AI Stocks, But This One Is Rising Most (Part-2).

Mercedes Benz and Stellantis (home of Chrysler, Jeep, Dodge, and other brands) use SoundHound's technology to build in-car virtual assistants who comprehend vehicle functionality and answer general questions.

SoundHound's "Dynamic Interaction With Generative AI" technology enhanced those items in early February. It's a novel interface that responds to speech and touch requests with audiovisual material. It may decide whether to include maps, internet search results, photos, and videos to improve user experience.

Although up 47% from 2022, SoundHound only made $45.9 million in 2023. By year's end, the company's order backlog reached $661 million. Its backlog doubled from 2022. Thus, SoundHound's backlog could lead to significant growth in the future despite its low revenue.

SoundHound's 2024 prognosis suggests that. Revenue should reach $70 million this year, boosting growth to 49%. One drawback investors should be aware of. Small software companies often lose money when scaling up, but SoundHound only has $99.5 million in capital and can't afford to repeat last year's losses.

SoundHound may need outside funding in the coming years. An equity issuance could dilute investors and lower its stock price.

When investors learned about Nvidia's investment in SoundHound AI, stock rose more than 60% on Feb. 15. On Feb. 26, Nvidia expanded its cooperation with ServiceNow to improve telecoms using generative AI, sending it up 46%.

Nvidia and ServiceNow will develop generative AI technologies to improve customer support. This deal doesn't include SoundHound, but conversational AI is ideal for automating phone conversations and improving customer service.

Investors believe Nvidia's recent investment in SoundHound stock could assist the conversational AI specialist. In Q4 2018, SoundHound reported a "notable, first-of-its-kind revenue contribution from a preeminent AI chip company." The date matches Nvidia's investment in SoundHound, although details are unavailable.

SoundsHound AI stock may be a speculative gamble on the AI business until it's more financially stable. That's fine as long as investors know it'll be more volatile than the ordinary stock.

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