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Can SoundHound AI Stock Be the Next NVIDIA, and Is It a Buy?

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Key Takeaways

  • NVDA's market cap neared $4T as it posted 69% sales growth and strong demand for its Blackwell chips.
  • SOUN shares jumped 211.6% on rising demand for voice AI in sectors like restaurants and customer service.
  • SOUN posted Q1 revenues of $29.1M with 151% growth, but losses hit $188M over the past year.

With the progress of artificial intelligence (AI), NVIDIA Corporation (NVDA - Free Report) has experienced rapid business growth. However, SoundHound AI, Inc. (SOUN - Free Report) , a provider of voice AI platforms, saw its shares outpace NVIDIA's last year. So, is it now the next major player in the AI industry, and worth investing in? Let’s find out –  

NVIDIA Hit $4T Market Cap, Poised for Growth 

NVIDIA’s market cap reached the coveted $4 trillion mark on Wednesday, surpassing fellow publicly traded companies, such as Microsoft Corporation (MSFT - Free Report) and Apple Inc. (AAPL - Free Report) . NVIDIA’s shares closed Wednesday’s trading session up 1.8%, with its market cap slightly below the $4 trillion milestone.  

It’s been a volatile year for NVIDIA stock. The company had to face DeepSeek’s cost-effective large language model threat, but it overcame the challenge, and its shares have increased 24% over the past year. The gains came as NVIDIA continued to benefit from the generative AI hype since the launch of OpenAI’s ChatGPT.  

Developers are opting for NVIDIA’s CUDA software platform, designed to both train and run AI programs, giving the company a strategic advantage over rivals such as Intel Corporation (INTC - Free Report) and Advanced Micro Devices, Inc. (AMD - Free Report) . 

NVIDIA overcame President Trump’s tariffs and export curbs on the sale of its chips to China. NVIDIA delivered its cutting-edge Blackwell chips to customers, boosting sales by 69% year over year to $44.1 billion in the fiscal first quarter. 

Reasons for SoundHound AI’s Rising Shares 

SoundHound AI has made significant strides in AI, and its share price surged 211.6% in the past year, outpacing NVIDIA. Demand for SoundHound AI’s voice solutions is increasing due to efficiency, automation, and rising customer demand for quick service.  

Restaurants facing labor shortages are adopting these solutions, with clients including Chipotle Mexican Grill, Inc. (CMG - Free Report) and Casey’s General Stores, Inc. (CASY - Free Report) . Eased trade tensions could further reduce overseas costs, enhancing profitability. 

SoundHound AI’s first-quarter revenues came in at $29.1 million, up 151% year over year. The company projects 2025 revenues of $157-$177 million, up from $84.7 million last year. A $140 billion total addressable market (TAM) and 1.2 billion booking backlog further suggest promising long-term growth (read more: SoundHound AI Vs. BigBear.ai: Which Stock Is the Better Buy?). 

Is Investing in SOUN Stock a Wise Move Now? Is It the Next NVIDIA? 

The widespread adoption of SoundHound’s voice AI boosted the stock, and stakeholders should remain invested due to strong revenue growth prospects. However, it’s prudent for new entrants to wait for the company to be profitable before placing a bet on SoundHound AI stock.  

SoundHound AI incurred $188 million in losses in the past year. In contrast, NVIDIA’s net profit margin of 51.7% surpassed the Semiconductor - General industry’s 49.5%, indicating room for further growth.  

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Additionally, SoundHound AI lacks the competitive advantage that NVIDIA possesses, which holds over 80% of the graphics processing units (GPUs) market and helps it endure market fluctuations. Therefore, it’s too soon to say that SoundHound AI will be the next NVIDIA.  

For now, NVIDIA and SoundHound AI both have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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