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

With the progress of artificial intelligence (AI), NVIDIA Corporation NVDA has experienced rapid business growth. However, SoundHound AI, Inc. SOUN, 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 and Apple Inc. AAPL. 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 and Advanced Micro Devices, Inc. AMD. 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 and Casey’s General Stores, Inc. CASY. 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.  Image Source: Zacks Investment ResearchAdditionally, 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.Higher. Faster. Sooner. Buy These Stocks NowA small number of stocks are primed for a breakout, and you have a chance to get in before they take off.At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We’ve combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month.You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days.Download the report free now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Intel Corporation (INTC): Free Stock Analysis Report Apple Inc. (AAPL): Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Chipotle Mexican Grill, Inc. (CMG): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Casey's General Stores, Inc. (CASY): Free Stock Analysis Report SoundHound AI, Inc. (SOUN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks