Discover SoundHound (SOUN): NVIDIA's Partner and AI Stock Set to SOAR to $15 in 2024! 300% GAIN!

Money Morning
19 Mar 202410:48

TLDRChris Johnson discusses SoundHound, an AI discovery stock that has seen significant growth in 2024, with shares up over 250%. The company specializes in speech recognition technology, initially for the auto industry and now expanding into AI-activated menu ordering systems for the fast-food sector. Despite an earnings miss, SoundHound's potential is highlighted by its association with Nvidia, which holds a small stake in the company. Johnson sees SoundHound's stock price potentially reaching $15, with $10 acting as a psychological resistance level. He emphasizes SoundHound's status as an AI leader and a speculative investment with significant growth potential.

Takeaways

  • 🚀 SoundHound has seen its shares surge over 250% in 2024, becoming a hot AI Discovery stock.
  • 📈 The stock price jumped from around $2 to $10, partly due to Nvidia's purchase of a significant share.
  • 🤖 SoundHound is an AI company initially known for speech recognition, now expanding into AI-activated systems in the automotive and fast-food industries.
  • 🔍 Nvidia's interest in SoundHound is noteworthy, as they were once an AI Discovery stock themselves and have since grown significantly.
  • 💡 AI Discovery stocks are newly formed or transitioning companies dealing with new AI technology, often with speculative products and limited earnings history.
  • 📊 SoundHound is lightly covered by Wall Street with only six analysts, offering an opportunity for discovery and potential growth.
  • 🎯 The average target price for SoundHound is $730, reflecting an upgrade that occurred recently.
  • 📉 Despite an earnings miss, SoundHound's revenue grew by 80% year-over-year, indicating potential profitability in 2024.
  • 📈 The stock's $10 level is a psychological milestone; however, the speaker would consider adding to their position at $6 if more profit-taking occurs.
  • 🔮 The speaker's personal target for SoundHound is $150 for 2024, expecting the stock to surpass $10 and continue upward momentum.
  • 📢 Upcoming presentations and updates from Nvidia's conference could provide new headlines and performance expectations for SoundHound.

Q & A

  • What is SoundHound and why is it gaining attention in the AI space?

    -SoundHound is an AI company that initially focused on speech recognition and has worked with the auto industry to implement this technology in vehicles. It has now expanded into developing AI and speech-activated menu ordering systems for the quick service or fast food industry.

  • How has SoundHound's stock performance been in 2024?

    -In 2024, SoundHound's shares have traded up more than 250% and at one point went from about $2 to $10. This performance is partly fueled by a purchase by Nvidia, which owns approximately 3% of SoundHound shares.

  • What is the significance of Nvidia's investment in SoundHound?

    -Nvidia's investment in SoundHound, a company known for its AI technology, indicates that Nvidia sees potential in SoundHound's capabilities and growth prospects. This has sparked interest in the market and increased investor confidence in SoundHound.

  • What does an AI Discovery stock refer to?

    -An AI Discovery stock is a newly formed or transitioned company that is dealing with new AI technology. These companies are not just discovering AI but are actively applying it to various industries, often without substantial earnings or product history, making them speculative investments.

  • What is the current average target price for SoundHound according to analysts?

    -The current average target price for SoundHound is $730, which reflects an upgrade that happened recently. This indicates that analysts have a high expectation for the stock's future performance.

  • What was SoundHound's performance against Nvidia in terms of stock price in 2023?

    -In 2023, SoundHound outperformed Nvidia in terms of stock price. However, Nvidia overtook SoundHound in performance starting in July of that year.

  • What happened with SoundHound's earnings report?

    -SoundHound missed its earnings expectations by 1 cent, reporting a loss of 7 cents per share instead of the expected 6 cents per share. Despite this, the company guided revenue and earnings in line for the next quarter and showed 80% year-over-year growth in revenue.

  • What is Chris Johnson's investment strategy regarding SoundHound?

    -Chris Johnson owns shares of SoundHound and considers adding to his position if the stock price reaches around $6, which he sees as a good entry point. He expects the stock to break through the $10 resistance level and potentially reach $15.

  • What does Chris Johnson suggest as the next move for SoundHound's stock price?

    -Chris Johnson suggests that after SoundHound's stock breaks through the $10 level, it could quickly move towards $12.50 and then $15, with increased analyst coverage potentially driving more investment in the stock.

  • What historical comparison does Chris Johnson make to illustrate SoundHound's potential?

    -Chris Johnson compares SoundHound to Nvidia, which was also an AI Discovery stock less than a decade ago. He suggests that just as Nvidia has grown significantly since then, SoundHound has the potential to follow a similar trajectory.

  • What advice does Chris Johnson give to investors interested in SoundHound?

    -Chris Johnson advises investors to consider buying SoundHound at around $6 to $8, as he sees this as a supportive price level. He also encourages investors to keep an eye on the company's next earnings report and any updates from Nvidia's conference, as these could influence the stock's performance.

Outlines

00:00

🚀 Introduction to SoundHound AI Discovery Stock

Chris Johnson introduces the audience to SoundHound, an AI discovery stock that has seen significant growth in 2024, with shares trading up over 250%. He discusses the company's focus on speech recognition technology, its applications in the automotive and fast-food industries, and the strategic investment by Nvidia, highlighting the potential for SoundHound in the AI space. Johnson also explains the concept of AI discovery stocks, emphasizing that these are companies dealing with new AI technology, often with speculative products and limited earnings history.

05:02

📈 SoundHound's Market Performance and Analyst Coverage

The script delves into SoundHound's market performance, comparing it with Nvidia's stock performance. It mentions the average target price of $730 due to a recent upgrade and discusses the stock's historical performance against Nvidia. Johnson provides a detailed analysis of SoundHound's price chart, mentioning resistance levels and his personal investment strategy. He also addresses SoundHound's earnings miss, revenue growth, and the potential for future profitability, setting a personal target of $1250 for the stock in 2024.

10:03

🌟 Wrapping Up SoundHound's Potential

In conclusion, Chris Johnson reiterates SoundHound's status as an AI discovery stock, emphasizing its potential for growth and the opportunity presented by its recent earnings miss. He advises on potential buying points for the stock and anticipates increased analyst coverage and target price adjustments. Johnson also mentions SoundHound's participation in Nvidia's conference, hinting at possible future updates on the company's performance and reiterating his bullish stance on the stock.

Mindmap

Keywords

💡AI Discovery Stocks

AI Discovery Stocks refer to newly formed or transitioned companies that are dealing with new AI technology. These companies are not just discovering AI but are actively applying it to various industries. In the context of the video, SoundHound is an example of an AI Discovery stock, as it is applying AI technology to the automotive and fast-food service industries. The term is significant as it highlights a category of stocks that are emerging leaders in the AI space and are potentially undervalued or under-recognized by the market.

💡SoundHound

SoundHound is an AI company that has gained prominence for its focus on speech recognition technology. Initially working with the automotive industry to implement voice-activated systems in vehicles, SoundHound has expanded its reach to include AI and speech-activated menu ordering systems in the fast-food industry. The company's stock performance and its adoption by major tech players like Nvidia are key indicators of its potential in the AI sector.

💡Nvidia

Nvidia is a leading technology company known for its graphics processing units (GPUs) and its significant contributions to the AI and deep learning fields. In the context of the video, Nvidia's purchase of SoundHound shares is highlighted as a strategic move that speaks volumes about the potential of SoundHound in the AI space. Nvidia's own history as an AI Discovery stock is also mentioned, drawing parallels between its past and SoundHound's current position.

💡Speech Recognition

Speech recognition is a technology that enables a device or system to recognize and understand human speech, converting it into actionable commands or text. In the video, SoundHound's focus on speech recognition is emphasized as a key aspect of its business model, particularly in its applications within the automotive and fast-food industries. The technology allows for hands-free control of vehicle systems and automated ordering at fast-food restaurants, enhancing user convenience and safety.

💡Stock Performance

Stock performance refers to the change in the market price of a stock over a certain period, reflecting the company's financial health and market perception. In the context of the video, SoundHound's stock performance is analyzed, with a significant year-to-date increase and a detailed discussion of its price movements, resistance levels, and future projections.

💡Analyst Recommendations

Analyst recommendations are the opinions and advice provided by financial analysts regarding the potential performance of a stock or the attractiveness of a stock as an investment. These recommendations can significantly influence investor decisions and stock prices. In the video, the high percentage of 'buy' recommendations for SoundHound and the number of analysts covering the stock are discussed as indicators of market sentiment and potential for growth.

💡Earnings Miss

An earnings miss occurs when a company's reported earnings per share (EPS) are lower than the amount predicted by analysts. This can negatively impact the stock price as it may indicate that the company's financial performance is not meeting expectations. In the context of the video, SoundHound's earnings miss is discussed, but it is noted that the impact was minimal and the company's revenue showed significant year-over-year growth.

💡Moving Average

A moving average is a technical analysis tool used to smooth out price data and identify trends by creating a constantly updated average price. The 20-day moving average, specifically, is a commonly used indicator that helps traders identify short-term trends and potential support or resistance levels. In the video, the 20-day moving average is referred to as the 'Traders trend line' and is used to analyze SoundHound's stock performance.

💡Target Price

The target price is the estimated value that analysts believe a company's stock should reach within a certain time frame. It is based on various factors, including the company's financials, industry trends, and market conditions. In the video, the average target price for SoundHound is mentioned as $730, which reflects the high expectations for the company's future growth and success in the AI sector.

💡Wall Street

Wall Street is a metonym for the financial markets of the United States, particularly the New York Stock Exchange (NYSE) and the financial district of New York City. It represents the collective financial institutions and investors that play a significant role in global finance. In the video, Wall Street's discovery of SoundHound as an AI leader is highlighted, indicating a shift in market perception and potential for increased investor interest.

💡Earnings Report

An earnings report is a financial statement released by a company that summarizes its financial performance over a specified period, typically a quarter or a year. It includes key metrics such as revenue, net income, earnings per share, and guidance for future periods. Earnings reports are closely watched by investors as they provide insights into a company's profitability and growth prospects. In the video, the anticipation of SoundHound's next earnings report is mentioned as a potential catalyst for stock price movement.

Highlights

SoundHound has seen its shares trading up more than 250% during 2024 year to date.

The stock price of SoundHound went from about $2 to $10.

Nvidia's purchase of SoundHound shares, approximately 3%, was publicized by The Wall Street Journal in early January.

SoundHound is an AI company initially focused on speech recognition and has now expanded into AI and speech-activated menu ordering systems.

SoundHound's products can be found in automated ordering systems at fast-food chains like Jersey Mikes and White Castle.

Nvidia's interest in SoundHound may be linked to their past work in heads-up displays and their evolution from an AI Discovery company.

AI Discovery stocks are newly formed or transitioned companies dealing with new AI technology.

The United States economy is over 75% service-based, indicating that the next round of money to be made from AI will involve the service industry.

AI Discovery companies often lack fundamental proof, such as earnings and product history, making them speculative investments.

SoundHound's stock is lightly covered by Wall Street, with only six analysts providing recommendations.

The average target price for SoundHound is $730 due to an upgrade that occurred last week.

SoundHound's stock performance was compared to Nvidia's, showing SoundHound outperforming Nvidia in 2023.

Chris Johnson, the speaker, owns shares of SoundHound and sees the $6 level as an opportunity to add to his position.

The speaker expects SoundHound to surpass $10 and reach a target of $1250 within the next three to six months.

SoundHound is part of Nvidia's conference, with potential for headlines and performance updates.

The speaker suggests buying SoundHound at $6 to $8, with $10 being the next resistance level.

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