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SoundHound AI: Two AI Investments with Hidden Value

In AI stocks, SoundHound AI has stolen the spotlight with its meteoric rise in stock value. However, beneath the surface of this high-flying stock lie two AI gems that promise not just innovation but also value for savvy investors.

SoundHound AI

SoundHound AI, a vanguard in voice AI technologies, has seen its stock soar by an impressive 288% in 2024, capturing the imagination of investors with visions of becoming a cornerstone in AI innovation. The company’s swift revenue growth and a robust project pipeline, bolstered by an endorsement from AI luminary Nvidia, have propelled its stock to new heights.

Yet, with SoundHound AI’s valuation soaring to 42 times sales—far eclipsing the tech sector’s average—a sense of caution has crept in among investors pondering the wisdom of investing at such high valuations. This caution brings us to two other AI veterans, whose current market valuations hint at untapped potential.

Read also: AI in Accounting: A Beginner’s Guide

Nvidia: The Unseen Value Amid Rapid Growth

At first glance, Nvidia’s valuation, sitting at 36 times sales, might not scream ‘bargain.’ Yet, delving deeper into its financials uncovers a story of rapid growth that positions Nvidia as a compelling buy. The company’s revenue and adjusted earnings have seen astronomical increases, far outstripping SoundHound AI’s performance, underpinning a growth trajectory that’s anything but slowing down.

Nvidia’s Bright Future

Nvidia’s forecasted revenue for the upcoming fiscal quarter paints a picture of continued dominance, with earnings projections set to nearly triple in the coming years. This growth narrative makes Nvidia’s stock, trading at 30 times its future earnings, an attractive proposition, especially when considering its PEG ratio—a metric that underscores the stock’s value relative to its growth potential.

Taiwan Semiconductor Manufacturing (TSMC)

TSMC, the unsung hero in the AI chip revolution, offers an intriguing investment opportunity at its current valuation. The company’s indispensable role in manufacturing AI chips for industry giants like Nvidia underscores its significance in the AI ecosystem, all while trading at a valuation that pales in comparison to its peers.

The Road Ahead for TSMC

With the AI chip market poised for explosive growth, TSMC’s strategic initiatives to ramp up its manufacturing capabilities signal a future of robust growth, potentially surpassing market expectations. The prospect of TSMC’s stock jumping by 91% based on forward earnings estimates highlights the stock’s undervaluation and the lucrative opportunity it presents for investors.


While SoundHound AI’s dazzling ascent might captivate the market’s attention, the underlying value and potential of Nvidia and TSMC make them undeniable contenders for those looking to invest in AI’s promising future. These two stocks represent not just growth but value, offering a strategic avenue for investors to diversify their AI portfolio beyond the headlines.


Q1: Why might Nvidia be considered undervalued despite its high sales multiple?
A1: Nvidia’s rapid revenue and earnings growth, coupled with its strong future growth forecasts and favorable PEG ratio, suggest it’s undervalued relative to its growth prospects.

Q2: What makes TSMC a compelling AI stock investment?
A2: TSMC’s dominant position in the semiconductor foundry market and its critical role in AI chip manufacturing, combined with its relatively low valuation metrics, highlight its investment appeal.

Q3: Can SoundHound AI’s high valuation be justified?
A3: While SoundHound AI has shown impressive growth, its current valuation exceeds the tech sector’s average significantly, making it less attractive to investors seeking value.

Q4: What is a PEG ratio, and why is it important?
A4: The Price/Earnings to Growth (PEG) ratio measures a stock’s valuation against its earnings growth rate. A PEG ratio below 1 often indicates an undervalued stock, making it a crucial metric for investors.

Q5: How does Nvidia’s growth compare to SoundHound AI?
A5: Nvidia’s revenue and earnings growth have significantly outpaced SoundHound AI, indicating a stronger financial performance and growth trajectory.

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