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Nvidia’s recent strategic investments in artificial intelligence-related companies, including voice AI recognition firm SoundHound AI, could mark the beginning of a significant growth trajectory for the semiconductor giant, according to Wedbush Securities.
“We view this move as a positive indicator for the company as this investment now further solidifies the company’s brand within the AI Revolution with the Godfather of AI Jensen [Huang] and NVDA now backing SOUN and we believe this could be the start of a broader investment into the company down the line which is a clear tailwind,” analysts led by Dan Ives wrote in an investor note.
The firm has an Outperform rating and a $5 price target on SoundHound.
Nvidia also disclosed investments in Arm Holdings (ARM), Chinese self-driving truckmaker TuSimple (TSPH), biotech company Recursion Pharmaceuticals (RXRX) and medical imaging developer Nano-X Imaging (NNOX).
Nvidia’s initial investment in SoundHound dates back to 2017 when it participated in a $75M funding round to support its international growth. Since then, it has acquired approximately 1.73M shares worth $3.67M, a small portion for a company valued at around $1.8 trillion.
However, as AI increasingly permeates every aspect of society, Nvidia is demonstrating its commitment by investing in the AI revolution, particularly in areas relevant to daily consumer interactions.
SoundHound’s capabilities span across various domains including automobiles, televisions, and internet-connected devices. The company has established partnerships with Stellantis (STLA) in Europe and Hyundai in the U.S. It also provides AI voice customer solutions, with several retailers such as Jersey Mike’s and Krispy Kreme integrating its offerings into their stores.
Now, with Nvidia firmly backing the Santa Clara, Calif-based company, SoundHound is poised to make significant strides in the AI chatbot market and other emerging use cases, according to Ives.
Implications of the Investment
