SoundHound AI (NASDAQ:SOUN), a leading AI technology company focused on voice-enabled products and services, faces a simple but important question in the broader AI revolution: Would you trust an AI assistant to take your food order?
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Skepticism around AI voice agents replacing human touch is nothing new, but one investor, known by the pseudonym Deep Value Investing, seems to be rethinking that stance – and may be ready to start believing.
“The shift toward AI voice agents has gained such strong momentum that skeptics like me have no choice but to accept the current reality,” admits the investor.
Deep Value delves into how this shift could signal significant growth opportunities for SOUN in the coming years. Central to the investor’s analysis is SOUN’s increasing foothold in the food services sector, particularly in the Quick Service Restaurant (QSR) space, where the company has secured partnerships with 7 of the world’s top 20 brands, including Chipotle, Five Guys, and Panda Express.
“The growth potential in this sector is enormous, with analysts projecting the food automation market to reach $14 billion in 2024, while the company currently holds just a 0.1% market share,” the investor explains.
In addition, Deep Value trumpets SoundHound’s recent success in diversifying to additional clients and industries. The investor expects the company to continue growing its clientele in the financial services, healthcare, insurance and automotive sectors.
This includes a groundbreaking project with the industry-leading Nvidia, which is capable of operating without cloud connectivity, Deep Value adds.
Along with the optimistic take, the investor does sound one particular note of caution regarding SoundHound’s long-term prognosis. Should AI-driven ordering systems experience embarrassing public failures – the type that can go viral on social media – QSR operators might reconsider their reliance on AI solutions, potentially curbing adoption.
And yet, the rewards outweigh the risks for Deep Value, who concludes that there is “an asymmetrical upside for SoundHound.” The investor therefore rates SOUN shares a Buy. (To watch Deep Value Investing’s track record, click here)
So, that’s Deep Value’s view, what does Wall Street have in mind? The current outlook offers a conundrum. On the one hand, based on 3 Buys and 2 Holds, the stock claims a Moderate Buy consensus rating. However, after soaring so high this year, the analysts expect shares to cool down and anticipate downside of 46%. It will be worth watching whether these analysts update their price targets in the near future. (See SOUN stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
