Unlocking the Power of Artificial Intelligence: A Closer Look at Nvidia’s Investments
As the world’s largest companies continue to shape the future of technology, one name stands out: Nvidia. With a market capitalization of $3.3 trillion, Nvidia’s dominance in the field of artificial intelligence (AI) is undeniable. Its graphics processing units (GPUs) are the gold standard for developing AI models, driving the company’s incredible growth over the past two years.
Nvidia’s AI Investment Strategy
CEO Jensen Huang has been spreading Nvidia’s good fortune by investing in other AI stocks. According to its latest 13-F filing, Nvidia now owns six AI stocks, including Applied Digital Corp, Arm Holdings, Nano-X Imaging, Recursion Pharmaceuticals, Serve Robotics, and SoundHound AI. Arm Holdings received the largest investment, with Nvidia’s position worth $280 million at the end of the third quarter of 2024.
SoundHound AI: A Leader in Conversational AI
One of Nvidia’s most promising investments is SoundHound AI, a leader in conversational AI technologies. SoundHound’s software is primarily used in the automotive, hospitality, and quick-service restaurant industries. Its acquisition of Amelia has expanded its reach into other industries like financial services, insurance, healthcare, and more. Top customers include automotive giants like Mercedes-Benz and Stellantis, as well as popular restaurant chains like Chipotle, Krispy Kreme, and Papa John’s.
SoundHound’s Impressive Growth
SoundHound generated a record $25.1 million in revenue during the third quarter of 2024, a whopping 89% increase from the year-ago period. The company has also significantly increased its guidance for 2024 and 2025, expecting to deliver between $82 million and $85 million this year and between $155 million and $175 million in 2025. SoundHound’s order backlog of over $1 billion is expected to convert into revenue over the next six years.
Is it Too Late to Follow Nvidia’s Lead?
While SoundHound’s growth is impressive, the company is still losing money, burning through $21.7 million on a GAAP basis during the third quarter. With only $136 million in cash on hand, SoundHound recently announced a new at-the-market equity facility to raise an additional $120 million by issuing more stock. This move will help secure the company’s future but may dilute existing shareholders.
A Speculative Way to Invest in AI
Based on SoundHound’s trailing-12-month revenue and current market capitalization of $3.2 billion, its stock trades at a price-to-sales (P/S) ratio of 37.5, making it more expensive than Nvidia. However, SoundHound’s revenue forecast for 2025 makes the stock appear cheaper on a forward basis. Investing in SoundHound is a speculative way to invest in the AI industry, so it’s essential to only put in money you can afford to lose.
Don’t Miss Out on the Next Big Opportunity
If you’re worried about missing out on the next big opportunity, now is the time to act. Our expert team of analysts issues “Double Down” stock recommendations for companies that they think are about to pop. Don’t miss your chance to invest in the future of AI.
Leave a Reply