Analysts rethink stock price target for Nvidia’s key AI partner

Here’s what could be next for the AI company's shares

Mar 1, 2025 - 17:08

Analysts rethink stock price target for Nvidia’s key AI partner

Nvidia (NVDA) no longer holds a stake in SoundHound AI (SOUN) .

The chip giant filed a 13-F with the Securities and Exchange Commission that showed it had sold its shares of SoundHound. This caused SoundHound to plunge 28% on Feb. 14 after the filing.

SoundHound is a California-based company that focuses on white-label voice artificial intelligence that enables businesses to create custom voice assistants.

The problem for those well-known AI voice assistants like Apple's Siri and Amazon's Alexa is that they are locked into tech giants' ecosystems, limiting companies' control over branding and data.

That’s where SoundHound saw an opportunity. Its clients span industries from Mercedes-Benz to IHG Hotels and Spotify.

The company has built an in-vehicle voice assistant that uses a large language model powered by Nvidia’s Drive technology.

Nvidia backed this company. In February 2024, it disclosed an investment of $3.7 million in SoundHound.

SoundHound recently reaffirmed its partnership with Nvidia.

In a Feb. 27 investor call, SoundHound's CEO, Keyvan Mohajer, highlighted its "strong presence" at January's CES, an annual technology trade show.

"In addition to unveiling the first-ever in-vehicle voice commerce ecosystem, our CES participation also featured collaborations with Nvidia, Perplexity, Lucid Motors, LG, and a broad range of restaurant partners," Mohajer said.

He also said SoundHound will participate in Nvidia's upcoming GTC 2025 event, "where we will be showcasing demos of our voice assistant, leveraging generative AI on the edge with Nvidia DRIVE AGX, as well as our voice commerce ecosystem."

SoundHound stock is down 53.58% year-to-date.
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SoundHound surges on solid earnings

SoundHound AI released a strong year-end performance on Feb. 27, which led to a 17.48% rally in its stock price during the following session.

The company reported a fourth-quarter loss per share of 5 cents, better than Wall Street's consensus estimate of an 8-cent loss. Revenue for the quarter came in at $34.5 million, surpassing expectations of $33.7 million.

"We had a breakthrough year, expanding our leadership position in voice and conversational AI through major customer wins, expanded partnerships, groundbreaking generative AI innovation, and strategic acquisitions," said Mohajer.

"As we move into the era of Agentic AI, we are uniquely positioned to capitalize on this evolving category. Together with our existing broad portfolio of voice-enabled AI solutions, we can deliver even greater commercial impact," he added.

The company "closes the year with nearly $200 million in cash and no debt," according to a press release.

For fiscal year 2025, SoundHound raised its revenue outlook to a range of $157 million to $177 million, up from its previous forecast of $155 million to $175 million. Despite the increase, the new guidance fell short of the consensus estimate of $165.27 million.

Analyst raises SoundHound stock price target after earnings

Wedbush reaffirmed its outperform rating and $22 price target on SoundHound stock, citing "strong momentum heading into FY25."

"We believe that SOUN is a long-term winner in the AI Revolution as the innovative tech stack provides various use cases for Chat AI integrations," the firm said.

"The company remains an under-appreciated pure-play AI company that is making significant strides in taking share across the landscape with its enterprise AI software platform," the firm added.

DA Davidson raised its price target on SoundHound to $13 from $9.5 with a buy rating, thefly.com reported on Feb. 28.

The firm acknowledged SoundHound's robust 2024 results, with revenue growth continuing to exceed expectations.

DA Davidson also said that demand for SoundHound remains elevated as it expands its business with leading players in financials, healthcare, energy, and other industries.

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SoundHound's acquisition of Amelia has also expanded its total addressable market and helped diversify the business, the firm added.

SoundHound closed at $10.82 on Feb. 28. Despite the after-earnings surge, the stock is down 53.58% year-to-date.