SoundHound AI Stock Plummets as Nvidia Exits Stake: Implications for AI Market
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SoundHound AI Plunges After Nvidia Exits Its Stake. Should Investors Follow Suit? | The Motley Fool
SoundHound stock was pulled out of obscurity when it was revealed that the semiconductor giant purchased shares in the company in the fourth quarter of 2023. The stock immediately rocketed higher on the news, but it made its biggest move late in 2024, which appears to be when Nvidia was dumping its
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SoundHound AI Is Plummeting Today -- Is It Time to Buy the Stock? | The Motley Fool
SoundHound AI (SOUN -28.59%) stock is crashing Friday. The company's share price was down by 26.7% as of 11:45 a.m. ET, and had been down as much as 31.8% earlier in the trading session. The plunge was apparently driven by the news -- disclosed Friday morning in a Securities and Exchange
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Nvidia Just Sold 1 of Last Year's Best-Performing Artificial Intelligence (AI) Stocks
Nvidia's (NVDA -0.12%) graphics processors (GPUs) for the data center are the gold standard when it comes to developing artificial intelligence (AI). The company has added $3 trillion to its market capitalization over the last couple of years on the back of surging demand for those chips. Nvidia
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SoundHound AI stock crashes 23% as Nvidia dumps entire stake - What it means for investors and the AI market
SoundHound AI (SOUN) stock took a major hit on February 14, 2025, plunging 23.1% to close at $11.72. The drop came after Nvidia (NVDA) disclosed it had sold its entire stake in the voice AI company. This move raised concerns about SoundHound AI's future growth and led to heavy selling pressure on
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SoundHound AI Stock Drops 27% As Nvidia Exits Position - SoundHound AI (NASDAQ:SOUN)
Shares of SoundHound AI, Inc. SOUN are experiencing a sharp decline Friday following Nvidia's disclosure in a 13F filing that it has completely dissolved its stake in the company. What To Know: Nvidia's 13F report, filed with the SEC for the quarter ending Dec. 31 2024, showed the company no
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Should Investors Buy SoundHound AI Stock Before Feb. 27?
Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe
[7]
Why SoundHound AI, Serve Robotics, and Nano-X Imaging Are Getting Crushed Today (Hint: It Has to Do With Nvidia) | The Motley Fool
Shares of several artificial intelligence (AI) stocks in various sectors are getting crushed this morning after the AI chip king Nvidia revealed in documents filed with the Securities and Exchange Commission (SEC) that it exited its position in these companies. Shares of SoundHound AI (SOUN
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SoundHound AI's stock price drops significantly after Nvidia sells its entire stake in the company, raising questions about the future of the voice AI firm and the broader AI market.
SoundHound AI Stock Tumbles as Nvidia Exits Investment
SoundHound AI, a leading developer of conversational AI software, experienced a significant stock price drop following the news that Nvidia had sold its entire stake in the company. The revelation, disclosed in Nvidia's latest SEC filing, sent shockwaves through the AI investment community and raised questions about SoundHound's future prospects
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.Market Reaction and Stock Performance
SoundHound AI's stock plummeted by approximately 27-29% on February 14, 2025, closing at $11.72
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. This sharp decline erased a portion of the impressive gains the company had achieved in 2024, during which its stock had surged by 835%, outperforming many other AI-related stocks3
.Nvidia's Investment and Exit
Nvidia, a semiconductor giant and leader in AI hardware, had previously held approximately 1.71 million shares of SoundHound AI, valued at around $34 million at the end of 2024
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. The decision to divest this stake, while relatively small for Nvidia, sparked concerns among investors about SoundHound's technological edge and future growth potential1
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.SoundHound AI's Business and Growth
Despite the market's negative reaction, SoundHound AI has been making significant strides in the conversational AI space:
- Automotive Partnerships: The company has established relationships with about 20 auto brands, including Jeep, Hyundai, and Kia
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. - Restaurant Industry: SoundHound's AI solutions are being used in over 10,000 locations across popular chains like Chipotle and Papa John's
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. - Revenue Growth: The company is projecting 2024 revenue between $82 million and $85 million, with expectations to reach $155 million to $170 million in 2025
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Valuation and Future Outlook
Prior to the sell-off, SoundHound AI's valuation had reached high levels, with a price-to-sales (P/S) multiple of over 40 times 2025 analyst estimates. The recent pullback has brought this down to a more moderate 21 times forward P/S
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. However, the stock remains relatively expensive compared to other tech companies, trading at a P/S ratio of 50 based on current figures3
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Implications for the AI Market
Nvidia's decision to sell its stake in SoundHound AI, along with reducing positions in other AI-related companies, suggests a potential shift in the semiconductor giant's investment strategy. This move has led to speculation about Nvidia's plans to focus more on AI infrastructure and cloud computing rather than specific AI applications like voice recognition
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.Investor Considerations
While some analysts, like Wedbush's Daniel Ives, maintain that SoundHound AI remains a "long-term winner in the AI revolution," the loss of Nvidia as a key investor has introduced uncertainty
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. Investors are now faced with weighing SoundHound's strong revenue growth prospects against the potential risks highlighted by Nvidia's exit1
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.As the AI sector continues to evolve rapidly, SoundHound AI's upcoming earnings report and its ability to maintain growth without Nvidia's backing will be crucial factors for investors to watch
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. The volatility demonstrated by this event serves as a reminder of the dynamic and sometimes unpredictable nature of investments in emerging AI technologies.References
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