Nvidia has completely finished its position for voice recognition software developer Soundhound AI.
Following the end of each quarter, institutional investors managing more than $100 million must file Form 13F with the Securities and Exchange Commission (SEC). 13F itemizes individual equity money managers purchased and sold in the most recent quarter. Investors can use these filings as tools to reveal where “smart money” is looking for opportunities.
While most investors probably consider 13F a requirement for banks and hedge funds, don’t forget that non-financial institutions also make their own investments.
For example, NVIDIA currently owns inventory from five different public companies – ARM Holdings, Applied Digital, Recursion Pharmaceuticals, Nebius Group, and Weride. However, last quarter, Nvidia completely ended its position for Speech Recognition Artificial Intelligence (AI) Stock Sound Hound AI (soun -5.50%)).
Should I follow Nvidia’s decision to sell Soundhound AI? Please read to find out.
I’m looking at the big picture
When an investor decides to buy and sell shares, it is reasonable to assume that such a decision supports how the investor actually feels about the company. This logic is reasonable, but not necessarily.
Investors have held their position for a long time and sometimes sell stocks simply because they want to regain capital. Otherwise, investors are frankly because the stocks weren’t inherently strategic about the overall composition of the portfolio.
In my opinion, Nvidia’s decision to terminate its interest in Soundhound AI is somewhere in these two ideas.
The chart below shows stock activity around Soundhound AI for the fourth quarter. Obviously, the stock price rose almost five times in just three months, which has led to some oversized momentum.
Soun data by YCHARTS
My guess is that Nvidia recognized this momentum and decided to cash out. Given that Nvidia only owns around 1.7 million shares of Soundhound AI, the company is likely to have generated revenues of up to $20 million or $30 million (depending on when it was sold). This is a very sum for Nvidia, which is valued at over $3.4 trillion.
Image source: Getty Images.
Seeing opportunities for Nvidia in the automotive industry
Soundhound AI has made some impressive advances in terms of revenue acceleration, but the company is still burning a lot of cash. For me, voice recognition software for vehicles is actually an important opportunity for Nvidia. However, I think there are better options than Soundhound AI.
Soun revenue (quarterly) data from YCHARTS
Nvidia’s “Magnificent Seven” Cohorts Apple, Microsoft, Alphabet and Amazon have all developed their own AI-powered voice assistants that span a variety of applications. Considering that each of these companies is much more refined, refined and capitalized than Soundhound AI, Nvidia will explore or deepen its partnership with Megacap peers in the field of voice recognition software. I think there is more possibilities if you choose.
Plus, my personal feeling is that autonomous driving and vehicle design are the most advantageous opportunities for Nvidia when it comes to the intersection of automobiles and AI. Nvidia is already working closely with Mercedes-Benz, Volvo, BYD, NIO and many others as it relates to their respective AI ambitions.
Should I sell Soundhound AI Stock?
It is virtually impossible to know when to sell the stock. Rather, investors should weigh the advantages and disadvantages of continuing to maintain their position before making a decision to sell.
Given that Nvidia actually invested in Soundhound AI during the 2017 private funding round, Soundhound AI presents are not giving away gifts compared to AI Automotive Market or other players in the voice recognition space. , it makes more sense that Nvidia has decided to end that position. .
Given its small size and lack of profitability, we consider the Soundhound AI’s position to be highly speculative. If I were an equity investor, I would consider leaving or trimming my position. For me, Soundhound AI tends to exhibit meme stock characteristics rather than wise investments.
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of the board of directors of Motley Fool. Adam Spatacco has positions in Alphabet, Amazon, Apple, Microsoft, and Nvidia. Motley Fool has positions and recommends Alphabet, Amazon, Apple, Microsoft, Nebius Group, and Nvidia. Motley Fool recommends BYD Company and the following options: A $395 phone at Microsoft for January 2026 length and a $405 phone at Microsoft for January 2026 short term. Motley Fools have a disclosure policy.
