Growing investors run to find the next Nvidia. Since 1999, its shares have increased by more than 253,000%. A relatively low investment would have transformed into millions of dollars during this period.
Although there are distinct differences, Soundhound ai (Cash 0.73%)) has a major similarity with Nvidia. The increase in the latter, especially in recent years, is fueled by the rise Artificial Intelligence (AI). Based on this, Soundhound investors have a seat in the front row for future growth.
Investment in AI has become Berserk
Perhaps the largest contributor to the rise of NVIDIA in recent years has been the rapid increase in investments for AI infrastructure. The company manufactures specialized GPUs which are crucial for the training and management of AI networks and services. The increase in expenses on almost everything related to AI results in a higher demand for its products.
In the first half of 2024, spending on IA infrastructure increased by 97% worldwide, reaching almost $ 50 billion. By 2028, it should reach more than $ 200 billion. So, expect Nvidia’s revenues to continue to grow in two-digit percentages for the years to come.
How does all this translate into Soundhound? As a provider of AI services, it is positioned a little differently from a supplier of equipment. But spending on the type of service it provides should also see coherent growth in the coming years.
As its name suggests, Soundhound is focused on the applications dealing with human voice – think of AI agents responding to customer service calls, responding to steering wheel controls and interacting with drivers concerning the maintenance needs of their vehicles.
He already has pilot programs in each of these three areas, by associating with dozens of worldly recognized brands to generate real case studies.
Juniper Research classifies this opportunity as the “global conversational AI market”, which it values at around $ 14.6 billion. With an annual turnover of $ 84 million, Soundhound would already cost around 6% market share.
And Juniper’s forecasts this market will double more than $ 30.8 billion by 2029. With a strong portfolio of starting customers, a rapidly growing final market and a market share that leaves a lot of room for growth, Soundhound has the capacity to massively increase its revenues this decade.
Could Soundhound AI stock increase by 1,000% or more?
Here is the problem: the action is very expensive, negotiating sales at 33 times. Thus, even if analysts expect sales to increase by 96% in 2025 and 29% in 2026, a large part of this growth is already evaluated in shares. This will limit the overall increase potential, but it does not mean that stock is not a purchase.
NVDA PS ratio data by Ycharts; PS = sales prices.
Soundhound is unlikely to have 1,000% potentially this decade, not to mention the enormous growth published by Nvidia on its history. Yes, sales increases should be impressive in the years to come. But a large part of this will probably be offset, at least from the shareholder’s point of view, by reducing the price of the price to sales of action.
In a major way, the company has a lot in common with Nvidia. Its final market increases very quickly, fueled by continuous investments in AI. It could soon be another AI player that many investors know.
But is it capable of reproducing the dazzling rise of Nvidia? Probably not. The GPU manufacturer is exposed to the entire AI market, while Soundhound targets a single category, a single category, which becomes slower than IA infrastructure.
Soundhound Ai is always an attractive stock of growth for aggressive investors, but those who seek to take advantage of the revolution of artificial intelligence could be better with a more mature and more diverse player like Nvidia.
Ryan Vanzo Has no position in the actions mentioned. The Motley Fool has positions and recommends Nvidia. The Word’s madman has a Disclosure policy.