SoundHound AI stock surged due to AI boom, but plummeted after NVIDIA sold stake

From Nasdaq: 2025-02-18 15:05:00

SoundHound AI, Inc. stock has surged over 380% in the past year due to the AI boom. However, the stock plummeted 28.1% after NVIDIA Corporation sold its entire stake in SOUN. This move has raised concerns about SoundHound AI’s future growth prospects and market performance.

NVIDIA’s decision to divest from SoundHound AI may indicate a shift in focus towards cloud computing and AI infrastructure. SoundHound AI faces challenges like high valuations, resource constraints, and stiff competition from Alphabet Inc. in the voice recognition technology space. The company relies heavily on equity financing for growth.

Despite the setback, SoundHound AI remains a strong contender in the AI industry with revenue growth projections of $85 million for 2024 and $175 million for the current year. The company’s voice-enabled AI systems are in demand among electric vehicle manufacturers and quick-service restaurants like Chipotle Mexican Grill, Inc. Investors are advised to consider the long-term potential of SoundHound AI amid short-term volatility.

The Federal Reserve’s decision to keep interest rates steady won’t impact SoundHound AI’s cash flows significantly. NVIDIA’s stake in the company was minimal, so its exit is unlikely to have a substantial effect on SoundHound AI’s business operations. Risk-tolerant investors may view the recent selloff as a buying opportunity, while cautious investors may wait for further developments in SoundHound AI’s outlook.



Read more at Nasdaq: SoundHound AI Stock Selloff Explained – Buy More SOUN Shares?