SoundHound's AI Sees Early Wins, But Sky-High Valuation Raises Caution
• SoundHound AI develops audio and AI products focused on restaurants and automobiles, with potential to expand further. Nvidia has invested over $100 million in the company.
• SoundHound's products are seeing early adoption, including AI integration into Stellantis vehicles and automated phone ordering for Jersey Mike's.
• SoundHound has strong revenue growth and over $600 million in backlogged deals, but is currently losing money and relying on outside funding.
• SoundHound's stock valuation has exploded to over 38x sales, making it extremely expensive compared to other AI software stocks.
• SoundHound has potential if execution is strong, but current valuation leaves little room for error. Author advises taking a small position and waiting for valuation to improve.