Why SoundHound AI stock is breaking records

SoundHound AI stock is experiencing remarkable growth in Monday’s trading session, with its share price soaring by 39.5% as of 2:40 p.m. ET, according to S&P Global Market Intelligence data. This surge is primarily attributed to the recent announcement that Nvidia, along with other leading hardware and software companies, is enhancing AI technologies within the telecommunications sector.

The reason behind SoundHound AI stock rise

Nvidia’s decision to broaden its collaboration with ServiceNow to develop telecom technologies signals a promising outlook for SoundHound’s voice-based assistant business. As a result, the SoundHound AI stock has impressively risen by 180% throughout the trading year of 2024.

At the Mobile World Congress expo, a significant announcement highlighted Nvidia’s collaboration with major industry players like Arm Holdings, Microsoft, Amazon, Softbank, Samsung, Ericsson, and Nokia. This collaboration aims to enhance radio-access-network (RAN) and AI technologies in the telecommunications sector through the formation of the AI-RAN Alliance.

The alliance’s goal is to foster significant advancements in AI and communication technologies. Nvidia’s Senior Telecom Vice President, Ronnie Vasishta, emphasized the alliance’s role in bringing together companies across the spectrum to realize the potential of ubiquitous AI and the forthcoming 6G technology, which is expected to elevate AI capabilities and broaden the adoption of SoundHound AI’s services.

Despite these advancements, SoundHound AI did not appear on The Motley Fool Stock Advisor’s list of the top 10 stock picks for investors (Image credit)

Further strengthening the tech ecosystem, Nvidia announced an expanded partnership with ServiceNow to introduce generative AI solutions tailored for the telecom industry. Although these announcements did not specifically mention SoundHound AI, the market anticipates that these developments will serve as positive catalysts for the voice technology specialist.

Following disclosures last week, Nvidia’s investment in SoundHound AI became public, revealing a stake worth approximately $3.7 million. This disclosure significantly boosted SoundHound AI’s stock, reflecting the market’s optimism about the company’s future prospects in light of these strategic partnerships.

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What the future for SoundHound AI?

Looking ahead for SoundHound AI, the company recently announced that its Iris voice-assistant technology is set to enter full production and will be featured in vehicles from Stellantis. This integration, which leverages OpenAI’s ChatGPT technology, is expected to debut with Stellantis DS vehicles in the upcoming month.

The advent of new AI, RAN, and 6G technologies holds the promise of significantly enhancing the functionality of SoundHound’s personal assistant, potentially paving the way for a broad spectrum of innovative applications. Voice-based operating systems are increasingly being recognized as a crucial interface for future AI technologies.

SoundHound AI stock is experiencing remarkable growth in Monday’s trading session (Image credit)

Despite these advancements, SoundHound AI did not appear on The Motley Fool Stock Advisor’s list of the top 10 stock picks for investors. However, the stocks that were selected have the potential for substantial returns in the years to come. For instance, those who invested $1,000 in Nvidia when it was recommended by Stock Advisor on April 15, 2005, would have seen their investment grow to $482,894. Stock Advisor offers an effective blueprint for investment success, including portfolio-building advice, regular analyst updates, and two new stock recommendations each month. Since 2002, the service has achieved returns that more than quadruple those of the S&P 500.

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Featured image credit: Morgan Housel/Unsplash