SoundHound AI: An Overlooked Investment Opportunity in Artificial Intelligence

In the realm of artificial intelligence (AI), the spotlight often shines on industry giants such as Microsoft, Alphabet, and Amazon. However, there exist numerous hidden gems in the AI sector that offer promising investment opportunities. One such entity is SoundHound AI (NASDAQ: SOUN), an AI company primarily recognized for its music identification app, SoundHound, and a variety of other voice-recognition tools.

After making its debut on the stock market through a special purpose acquisition company (SPAC) in 2022, SoundHound’s stock value plummeted from a high of nearly $15 last May to its current price of $1.70. While some investors may be deterred by this drastic drop, a deeper exploration into SoundHound’s potential for growth suggests that this could be an opportune moment to invest in this often-misunderstood AI player.

SoundHound AI’s primary expertise lies in natural language processing. Its technology is capable of recognizing and processing human speech, a feature that can be utilized in a multitude of applications. For instance, car manufacturers like Stellantis and Hyundai are leveraging SoundHound’s generative AI to enhance the driving experience for their customers. The latest AI news indicates a significant potential for AI integration within the Internet-of-Things (IoT) market, particularly in smart-home appliances. This fact is further corroborated by partnerships between SoundHound and tech giants Qualcomm and Snap for IoT initiatives.

Voice-enabled assistants powered by SoundHound’s AI are also making their mark in the restaurant industry, facilitating food ordering and bill payments. This has led to popular point-of-sale systems like Toast and Square (now owned by Block) integrating SoundHound’s AI into their operations.

Despite its impressive clientele, SoundHound has to contend with formidable competitors like Apple’s Siri, Amazon’s Alexa, Microsoft’s Nuance, and Google’s voice assistant in the AI market. However, SoundHound’s estimate of its total addressable market standing at $160 billion suggests that there is enough room for multiple players to thrive. Furthermore, unlike Big Tech companies, SoundHound’s AI tools can be purchased à la carte, providing a level of flexibility that its competitors may not offer.

Financially, SoundHound is still a small player in the AI market with total sales of $8.8 million for the latest quarter and $36 million for the last 12 months. The company has also had to resort to cost-cutting measures, including layoffs, to extend its cash runway. Despite an improvement in its adjusted EBITDA by 50% compared to last year, the company is still operating at a net loss.

However, with over $115 million of cash on hand as of June 30 and access to a credit facility, SoundHound’s financial situation is not entirely bleak. Investors should keep a close watch on its liquidity position after Q3 earnings are published later this month.

While the company’s financial profile and the drop in its stock value might deter some investors, SoundHound’s potential as a takeover target cannot be ignored. However, investing in a company based purely on its buyout candidacy is not advisable.

Instead, investors should consider the broader picture. SoundHound operates in a vast market with no single dominant player. The potential applications for voice-enabled AI are still emerging due to the novelty of the technology. Many investors may have shifted their focus away from SoundHound due to its recent struggles, but with Big Tech stocks beginning to plateau, SoundHound could be an undervalued and overlooked opportunity.

For those seeking exposure to artificial intelligence without the hefty price tag associated with high-profile companies, SoundHound AI could be an intriguing addition to a diversified portfolio. As an AI text generator and an AI video generator, it offers unique opportunities in the growing AI and IoT markets. It’s certainly a company to watch in the latest AI news.