In recent years, SoundHound AI Inc. may not have gotten as much attention as Nvidia Corp., a leader in AI chips. However, demand for its voice-technology software driven by AI has sent its stock through the roof in 2024.
SoundHound SOUN +12.60% shares have gone up 575%, which is a lot more than Nvidia Corp. NVDA -1.81%’s 187.8% gain. In 2024, shares of Palantir Technologies Inc. PLTR+6.22%, a well-known AI company, are up 340.5%, while shares of C3.ai Inc. AI +8.08% are only up 39.4%.
Dow Jones Market Data show that SoundHound’s stock is on track for its best year ever, taking into account the growth of the company. The data goes back to April 28, 2022.
Last month, SoundHound announced record sales for the third quarter and raised its revenue forecast for the year, saying that the company was working to reach more people.
As part of the third-quarter results, SoundHound CEO Keyvan Mohajer said, “We believe that voice is the ‘killer app’ for applied generative AI.”
The growth of SoundHound has also caught the attention of experts. According to a note from Wedbush analyst Dan Ives last month, the company is continuing to see demand for its voice AI products in many industries, such as cars, restaurants, financial services, healthcare, and insurance. This is because the company wants to expand the types of industries that use its solutions. Our price goal for SoundHound went up from $9 to $10.
During its conference call for the third quarter, SoundHound also talked about its Polaris big language model. Mohajer said that Polaris takes the company’s own special technology for automatic speech recognition “to the next level.” Over the years, the company “carefully accumulated” billions of real talks and over a million hours of audio in dozens of languages. This is how Polaris has learnt, he said.
Mohajer said, “We’ve been putting Polaris into production, and the results are great.” “Accuracy is going up a lot, and hosting costs are going down at the same time.” The CEO says that Polaris handles about a third of all AI contacts that SoundHound handles for customers in restaurants.
As well as investing in SoundHound, AI giant Nvidia has also teamed up with the voice expert. For example, SoundHound stated earlier this year that it would be making an in-car voice assistant that runs on Nvidia’s DRIVE technology and has a large language model.
Wedbush’s Ives said, “The company continues to use its partnership with NVDA to bring voice generative AI to the edge without cloud connectivity. This will be demoed at CES 2025 and shows that its tech stack is getting better while it prepares to launch the third pillar (voice commerce ecosystem) of its growth strategy in 2025.” For SoundHound, Wedbush has given it an outperform grade.
D.A. Davidson analysts wrote in a note released last month that SoundHound’s purchase of corporate AI software company Amelia earlier this year had “materially expanded” its total addressable market and “helped diversify the business.” D.A. Davidson kept its buy rating on SoundHound and set a price goal of $9.50.
FactSet polled six experts, and four of them said they would buy SoundHound. The other two said they would hold on to their opinion.
