Trump slaps 30% tariffs on EU, Mexico
Nearly each new day since the “Liberation Day” on April 2nd, President Trump’s admin has rolled back more tariffs. Yesterday, Trump signed an executive order (EO) to amend the 25% tariffs on imported cars, qualifying them for reimbursements if the vehicles are finally assembled in the US.
Likewise, it has been reported that China made a secret list of US-made products that are to be exempt from retaliatory 125% tariffs. Although this is good news, it is difficult to run a business when input/outputs are still in a tenuous obfuscation zone. In such uncertain macro conditions, high growth stocks are first that are typically de-risked, particularly in the AI sector. But after the tariff dust inevitably settles down, such stocks could again rally to their previous high price points.
1. InterDigital
If you have used wireless communication, video service, or AI as applied to image and signal processing, its underlying tech came from InterDigital Inc (NASDAQ:IDCC). Case in point, the company developed the 802.11 Wi-Fi standard, omnipresent across laptops, smartphones, tablets, printers, and smart home gadgets.
Heavy in the R&D department, InterDigital holds over 30,000 patents and yet to be approved applications. Just for AI-related technologies, the company racked up over 400 patents from its AI Lab. This translates into new standards and codecs for deep video and machine-to-machine (M2M) video compression.
InterDigital is also exploring quantum computing as a way to leapfrog wireless networks, in particular with the use of Noise Intermediate Scale Quantum devices. Overall, InterDigital makes money from high margin IP licensing, which offsets the high R&D investments.
In its Q4 2024 earnings report released in February, the company announced a 58% year-over-year revenue increase for the full fiscal year, alongside a 68% rise in net income, reaching $358.6 million. Notably, InterDigital’s CE/IoT/Auto segment led the growth with an impressive 232% surge, driven by the automotive industry’s accelerating shift toward digital signaling for onboard systems.
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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
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Year-to-date, IDCC stock flattened at 1.4% gains, currently priced at $198.42 per share. Over the last 52 weeks, the average IDCC stock price is $161 with the highest point at $231.97. Per WSJ’s forecasting data, the average IDCC price target is $227 per share.
The bottom estimate of $210 is still significantly above the current price level, while the estimated ceiling for IDCC stock is $241 per share.
2. SoundHound AI, Inc.
We covered this conversational AI-powered voice company on multiple occasions, last time in March 2024 when the company’s executives cashed out. This stock should be approached as a high risk/high reward opportunity.
As one of the stocks in Nvidia’s portfolio, SoundHound AI Inc (NASDAQ:SOUN) shares suffered a 30% drop when Nvidia (NASDAQ:NVDA) exited its stake. The reason for the exit still persists, as SoundHound continues to accrue quarterly losses and burn cash.
In the last reported Q4 2024, the company suffered a $258.6 million net loss, up 1,336% from the year-ago quarter. Nonetheless, the revenue went up 101% during the same period, demonstrating strong demand for real-time voice interaction with devices/vehicles.
It is also the case that SoundHound nabbed a big opportunity with Chinese giant Tencent in April. Via Tencent Intelligent Mobility cloud for the auto industry, SoundHound will integrate its in-vehicle voice assistants. For such an important task, the company developed its own AI hallucination-mitigating techniques.
Given that confabulation is the key obstacle against wider AI adoption, it is safe to say that the company’s future depends on it. The time to revisit SOUN stock is now, ahead of its Q1 ‘25 earnings on May 8th.
SoundHound AI would have to beat the estimated earnings per share (EPS) of negative $0.09. In the year-ago quarter, the company reported its EPS at negative $0.07.
Against the current price of $9, the average SOUN price target is $13.91 per share. The bottom forecast is $8 while the top has a high profit potential of $26 per share, according to WSJ. Over the last 52 weeks, the average SOUN price is in line with the bottom forecast, at $8.18, while the highest SOUN price point was $24.98 per share.