Growth investors are currently in pursuit of the next major success like Nvidia, whose shares have increased by over 253,000% since 1999, transforming small investments into substantial sums. SoundHound AI, despite some differences from Nvidia, shares a key similarity: its potential growth driven by trends in artificial intelligence (AI). Investors in SoundHound are positioned to benefit from future advancements in this sector.
A significant factor in Nvidia’s recent growth has been the surge in investment in AI infrastructure. The company produces specialized GPUs essential for training and operating AI networks and services, leading to increased demand for their products. In the first half of 2024, global spending on AI infrastructure rose by 97%, nearing $50 billion, and is anticipated to exceed $200 billion by 2028. This trend suggests that Nvidia’s revenue could continue to grow considerably in the coming years.
SoundHound’s relevance in this context lies in its provision of AI services rather than hardware. The expected growth in investment for AI services suggests a positive outlook for the company. SoundHound specializes in voice-based AI applications, including AI agents for customer service calls, drive-thru orders, and vehicle maintenance interactions. The company has launched pilot programs in these areas with numerous recognized global brands to generate practical case studies.
Juniper Research identifies the “global conversational AI market,” valued at approximately $14.6 billion. With annual revenue of $84 million, SoundHound holds about a 6% market share. Juniper predicts that this market will more than double to $30.8 billion by 2029, giving SoundHound ample opportunity to significantly increase its revenue over the decade, given its base of early-stage customers and a rapidly growing market.
However, challenges exist, as SoundHound’s stock is considered costly, trading at 33 times sales. Although substantial sales growth is expected—96% in 2025 and 29% in 2026—these increases are largely reflected in the current share price, potentially limiting the upside. Despite this, the stock remains a viable option for growth investors.
While SoundHound shares some similarities with Nvidia, particularly its connection to a quickly expanding AI market, it is unlikely to replicate Nvidia’s historical growth due to its focus on a narrower segment of the AI industry. Acknowledging this, SoundHound AI remains an attractive proposition for aggressive growth investors, but those seeking broader benefits from the AI evolution might consider more established entities like Nvidia.
