Key points
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Nvidia and SoundHound AI share many similarities.
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SoundHound AI’s product currently dominates the restaurant industry.
Finding millionaire artificial intelligence (AI) stocks isn’t as easy as you might think. Generating huge returns from a single stock is rare, although several prominent examples exist. The key is to find a company that offers a product to a wide range of businesses, and that is at an early stage where huge benefits are still possible.
I think SoundHound AI (NASDAQ:SOUND) fits that description and follows the pattern of another millionaire stock: Nvidia.
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Person throwing money in the air.
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SoundHound AI is focused, but expanding into other industries
SoundHound AI offers software that combines AI and audio recognition. This allows SoundHound AI products to deploy AI agents wherever human-to-human interaction occurs. One of the best examples of SoundHound AI where this has been successful is in a fast food drive-thru. By automating this application, SoundHound AI has helped restaurants increase their profit margins in a notoriously cutthroat business. That’s still a relatively small part of the market, and just a fraction of where SoundHound AI could be.
The holy grail for SoundHound AI will be automating any industry that has significant customer service staff, such as finance, insurance, and healthcare. All of these industries employ countless customer service agents, but if AI agents can automate these, it will mean huge cost savings for their customers, which in turn will cause SoundHound AI’s finances to skyrocket. It’s already ringing true for many companies in these sectors, so SoundHound AI could be on its way to becoming the next millionaire stock.
I think this reflects the path Nvidia has taken. If you had invested $10,000 in Nvidia stock ten years ago, it would be worth almost $2 million today. Nvidia started on a similar path, developing GPUs for gaming graphics – a fairly niche industry. Eventually, GPUs saw increased use in other areas such as engineering simulations and cryptocurrency mining. AI has become the biggest use case to date and has caused stocks to skyrocket as demand soared.
SoundHound AI may never be as big as Nvidia. But if it can follow a similar path, starting with a targeted product and gradually expanding into larger industries, I think it could be a real winner. There is a huge application for its products; now the task becomes to develop a product so good that consumers won’t need a human operator. If it can achieve that, the sky is the limit for SoundHound AI stock.
Should You Buy Shares in SoundHound AI Now?
Consider the following before purchasing shares in SoundHound AI:
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Keithen Drury has positions in Nvidia and SoundHound AI. The Motley Fool holds positions in and recommends Nvidia and SoundHound AI. The Motley Fool has a disclosure policy.
