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Summary

The video discusses the upcoming earnings report of SoundHound, a company experiencing exponential growth with investments from Nvidia and strategic acquisitions. It highlights SoundHound's cash position, partnerships with major brands like Stellantis and potential contracts with McDonald's. The speaker recommends investing in SoundHound before earnings, outlining strategies to hedge positions and maximize returns. The video also emphasizes the company's strong patent portfolio and potential in the AI sector, suggesting SoundHound is a promising long-term investment.

Takeaways

• 📈 SoundHound is expected to release earnings tomorrow at 4:00 p.m. after the market closes.
• 🚀 The company has grown exponentially, attracting attention and investment from Nvidia, and is currently debt-free with $200 million in cash.
• 🔄 Nvidia owns 1,730,833 shares of SoundHound, indicating a significant stake in the company.
• 🔑 SoundHound has acquired Allset and has a partnership with Stellantis, suggesting expansion into automotive and European vehicle markets.
• 🍔 There are indications that SoundHound could potentially replace IBM in McDonald's drive-through voice recognition AI, expanding its presence in the restaurant industry.
• 📊 Analysts' consensus estimate for SoundHound's revenue is $13.01 million, with an expected growth of 48.69% from the previous year.
• 🗣️ SoundHound offers conversational AI solutions in 25 languages, which could benefit from the increasing demand for generative AI and large language models.
• 📈 The company has a strong portfolio and partner base, with demand in the restaurant and auto sectors expected to drive performance.
• 📊 SoundHound had a cumulative subscription and bookings backlog of $682 million at the end of Q1 2024, reflecting strong market demand.
• 🏆 With over 270 patents, SoundHound has a robust intellectual property portfolio, which is a significant advantage in the business world.
• 📊 The addressable market for SoundHound's AI solutions is massive, with opportunities in automotive, restaurants, customer service, entertainment, and IoT devices.
• 📉 The speaker recommends investing in SoundHound before earnings, suggesting a potential for significant returns if the company performs well.

Q & A

When is SoundHound's earnings report scheduled for?

SoundHound's earnings report is scheduled for 4:00 p.m. the following day after the market closes.

What has contributed to SoundHound's exponential growth?

SoundHound's growth can be attributed to its acquisition of Allset, partnerships with companies like Nvidia and Stellantis, and being debt-free with $200 million in cash.

How many shares does Nvidia own in SoundHound?

Nvidia owns 1,730,833 shares of SoundHound.

What is the significance of SoundHound being debt-free and having $200 million in cash?

Being debt-free and having a substantial cash reserve indicates financial stability and flexibility for future investments and growth opportunities.

What is the potential partnership with McDonald's that SoundHound might be involved in?

SoundHound might be picking up a contract with McDonald's for AI voice ordering and assistance, following McDonald's termination of a similar contract with IBM.

What is the consensus estimate for SoundHound's revenue and loss according to Zacks?

The Zacks consensus estimate for SoundHound's revenue is $13.01 million, with a suggested growth of 48.69% from the previous year's quarter. The consensus mark for loss is pegged at 9 cents per share.

How has SoundHound performed against earnings estimates in the past four quarters?

SoundHound has beaten the consensus estimate in two of the trailing four quarters, missed once, and was in line with the remaining quarter's estimate.

What is the average earning surprise percentage for SoundHound?

The average earning surprise for SoundHound is 4.72%.

What is the significance of SoundHound's AI solutions being offered in 25 languages?

Offering AI solutions in multiple languages allows SoundHound to cater to a global market, potentially increasing its customer base and revenue.

What is the estimated addressable market size for SoundHound in the automotive and restaurant industries?

The addressable market size for SoundHound in the automotive industry is expected to hit 95 million units by 2028, and for the restaurant market, it is expected to reach 4.4 trillion by the same year.

What is the strategy suggested for investing in SoundHound prior to earnings?

The strategy involves buying shares of SoundHound and using options to hedge the position, such as buying a put option and selling a covered call, to limit risk and potentially profit from the earnings play.