Nvidia Holds Stakes in Six Artificial Intelligence Companies. Here's Why One of Them, SoundHound AI, Dropped by 32% Recently.
Nvidia, with a market cap of $3.3 trillion in 2025, thrives on its top-notch graphics processors for data centers, particularly in the fields of AI development. The tech giant, led by CEO Jensen Huang, has been investing in AI stocks to continue fueling its growth.
Over the past year, Nvidia has splurged its funds on six AI-related companies, as per its latest SEC filing. These include Applied Digital Corp., Arm Holdings, Nano-X Imaging, Recursion Pharmaceuticals, Serve Robotics, and SoundHound AI.
SoundHound AI, a conversational AI pioneer, saw its stock skyrocket by 835% in 2024, making it the top performer in Nvidia's investment portfolio. However, SoundHound's stock took a hit in January 2025, plunging by 32%, as investors scaled back their positions in highly-valued stocks.
SoundHound AI is leaps and bounds ahead in conversational AI technology. Its applications automate drive-thru and phone orders in popular restaurant chains like Chipotle Mexican Grill and Panda Express. It also offers Employee Assist software for workforce information and has expanded its reach into industries like healthcare and financial services through its acquisition of Amelia.
Despite SoundHound's impressive revenue growth projections for 2025, the stock is considered overvalued, trading at a P/S ratio twice as high as Nvidia's. With a potential revenue surge of $175 million predicted for 2025, SoundHound's promising future remains in question as its overvalued stock situates it precariously in the investment landscape.
Sources:1. "SoundHound AI Stock: Should You Buy The Dip After Last Week's Plunge?" Motley Fool, January 20, 2025. Retrieved from Link2. "SoundHound AI Financial Highlights," The Motley Fool, January 2025. Retrieved from Link3. "What Happened to SoundHound AI Stock in 2024?" Investopedia, January 2025. Retrieved from Link4. "Nvidia's Investments in AI Stocks Set to Fuel Future Growth," Business Insider, January 20, 2025. Retrieved from Link5. "SoundHound AI's 2025 Revenue Projections Revealed," Yahoo Finance, January 20, 2025. Retrieved from Link
Nvidia's investment in SoundHound AI, a leading conversational AI company, is part of its strategy to further its growth in the finance sector, as they believe in the potential of AI to revolutionize various industries. Investors should consider the company's overvalued stock price, coupled with its promising revenue growth projections for 2025, to make informed decisions.
