SoundHound AI stock plummeted after Nvidia sold its position, facing financial challenges

SoundHound AI, a conversational AI software specialist, saw its stock soar after an investment from Nvidia in early 2024. However, Nvidia recently sold its entire position, causing SoundHound stock to trend lower. SoundHound’s impressive list of customers includes major brands like Chipotle, Hyundai, and more, but the company is facing challenges with its financials.

SoundHound’s revenue surged by 151% in Q1 2025, with a projected full-year revenue of $167 million. The company has an order backlog of $1.2 billion, indicating strong growth potential. However, SoundHound’s bottom line remains a concern, with a recent quarterly loss of $22.3 million on a non-GAAP basis.

Nvidia’s decision to sell SoundHound stock may be linked to the latter’s high valuation, currently at a P/S ratio of 39.3. SoundHound’s premium valuation compared to Nvidia’s suggests potential overvaluation. With SoundHound still in its early stages and facing financial challenges, investors may want to approach with caution.

Investors looking at SoundHound AI should consider its financial situation and market valuation before investing. The Motley Fool’s Stock Advisor team has identified other promising stocks for investment opportunities. SoundHound’s recent decline and financial struggles indicate a need for careful evaluation before making investment decisions.

Read more at Nasdaq: SoundHound AI Stock Has Plummeted by 53%. This Move by Nvidia Is a Key Reason Why.