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Northland Capital picks SoundHound stock "one of top picks for 2024" as NVIDIA takes stake in SoundHound AI

EditorIsmeta Mujdragic
Published 02/15/2024, 10:04 AM
© Reuters

On Thursday, Northland Capital Markets maintained its positive outlook on SoundHound AI Inc. (NASDAQ: NASDAQ:SOUN), reiterating an Outperform rating with a steady price target of $4.00. The affirmation of the rating followed the disclosure that NVIDIA Corp (NASDAQ:NVDA)., a major player in the AI and gaming industry, has made a significant investment in SoundHound AI.

The investment by NVIDIA was revealed in a 13F filing, which showed the acquisition of 1.7 million shares in SoundHound AI. This move by NVIDIA is seen as an endorsement of SoundHound AI's potential in the field of natural language processing (NLP) technology, which is becoming increasingly important for AI applications.

SoundHound AI's technology is recognized for its comprehensive NLP capabilities, which is essential for the development of large language models (LLMs) like those created by OpenAI. The ability to integrate its core technology with LLMs is a critical aspect of SoundHound AI's offering, potentially driving the demand for AI solutions and, by extension, NVIDIA's products.

The investment by NVIDIA is perceived as logical, given the synergy between NLP technology and the growing use of AI. With NLP being a key catalyst for AI utilization, NVIDIA's stake in SoundHound AI aligns with its interests in the sector.

SoundHound AI is highlighted as one of Northland Capital Markets' top stock picks for the year 2024, indicating a strong conviction in the company's prospects. The analyst's statement underscores the strategic nature of NVIDIA's investment and SoundHound AI's positioning in the burgeoning AI market.

InvestingPro Insights

Amid the news of NVIDIA Corp.'s (NASDAQ: NVDA) investment in SoundHound AI, NVIDIA itself remains a formidable force in the tech sector, as reflected by its real-time financial metrics and analyst insights from InvestingPro. NVIDIA's market capitalization stands at an impressive $1790.0 billion, underscoring its significant presence in the industry. The company's revenue growth has been robust, with a staggering increase of 57.07% over the last twelve months as of Q3 2024. This growth trajectory is echoed in NVIDIA's gross profit margin, which is a healthy 69.85%, indicating strong profitability in its operations.

Investors looking at NVIDIA's stock performance will note that the company's shares are trading near their 52-week high, with a price percentage of 99.05% of this peak value. This is a testament to the positive market sentiment surrounding NVIDIA, which is also reflected in the substantial one-year price total return of 224.78%. The company's investment in SoundHound AI could further bolster this sentiment, as it showcases NVIDIA's strategic moves to capitalize on advancements in NLP technology.

Two notable InvestingPro Tips for NVIDIA highlight the company's financial health and market position. NVIDIA boasts a perfect Piotroski Score of 9, indicating top-notch financial strength, and is recognized as a prominent player in the Semiconductors & Semiconductor Equipment industry. For investors intrigued by NVIDIA's strategic investments and financial standing, there are additional InvestingPro Tips available that provide deeper insights into the company's performance and prospects. With the use of the coupon code PRONEWS24, users can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking access to these valuable tips.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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