Semiconductor company Nvidia has led the S&P 500 higher this year amid mounting interest in artificial intelligence (AI). But we are still in the early stages of the AI boom, and certain Wall Street analysts are pounding the table on alternative investments. For example:
Gil Luria at DA Davidson expects SoundHound AI (NASDAQ: SOUN) to reach $9.50 per share in the next 12 months. That forecast implies 98% upside from its current share price of $4.80.
Ark Invest analysts led by Cathie Wood expect Tesla (NASDAQ: TSLA) to reach $2,600 per share by 2029. That forecast implies 1,040% upside from its current share price of $228.
Investors should never put too much confidence in price targets, but SoundHound AI and Tesla are worth further consideration. Here are the relevant details.
SoundHound AI: 98% implied upside
SoundHound specializes in conversational intelligence solutions, or voice artificial intelligence (AI) products, that can be incorporated into smart devices. Its technology has applications across various industries, from automotive and consumer electronics to restaurants and customer service. And the company has won several high-profile customers, such as Stellantis, Toast, and Qualcomm.
SoundHound is a small business competing against behemoths like Amazon and Microsoft. But management believes it has better technology and a more flexible platform than its competitors, which makes it easier for brands to build differentiated and customized voice AI solutions.
SoundHound is growing very quickly, but the company has yet to turn a profit. Revenue surged 54% to $13.5 million in the second quarter. Meanwhile, non-GAAP (generally accepted accounting principles) net income was negative $14.8 million, a slight improvement from negative $16 million in the prior year.
Earlier this year, SoundHound completed its $25 million acquisition of SYNQ3 Restaurant Solutions, a company that specializes in conversational intelligence for food and beverage brands. That deal established SoundHound as the largest provider of voice AI technology for restaurants. More recently,…
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