March 13, 2024

 

(THE AI REVOLUTION IS CHANGING RURAL AMERICAN LANDSCAPES & CREATING BILLION-DOLLAR PARTNERSHIPS)

March 13, 2024

 

Hello everyone,

Data centres are the new warehouses.

I wrote several weeks ago about REITS and how data centres are featured in that list.  Well, they will be popping up in rural America in big numbers in the future in response to the growing interest in AI.

Prologis, the $100 billion-plus real estate giant, could invest more than $25 billion into this sector in the coming years.  Big tech companies and venture capitalists are pouring billions into generative AI efforts based on its potential to reshape our virtual realities. 

The building boom reflects the physical infrastructure required to make that virtual world a possibility.  And it’s having very real-world consequences.  These data centres are being placed in rural America, which is impacting communities and changing the landscape both socially and culturally and putting added demands on utilities.  The story of how this construction boom pans out and how it affects communities across America is ever-changing.

An AI stock that is gaining traction – SoundHoundAI (SOUN)

This artificial intelligence voice-and-speech stock has surged almost 170% this year and nearly 340% in February alone as investors bet on new applications for the booming technology trend that has taken Wall Street by storm.  Last month, Nvidia (NVDA) revealed a $3.7 million bet on the stock in a securities filing, and management said on an earnings call that “demand is going through the roof.”

According to analysts, this stock is in a great position to capture the AI chatbot market demand wave with its technology providing more use cases going forward. Nvidia’s investment reinforces SoundHound’s value proposition and solidifies the company’s brand within the AI Revolution.  Furthermore, it lays the foundation for a potential larger investment in the future.

The company sits at a roughly $1.7 billion market capitalization and has yet to attain profitability. 

Nvidia is not the only notable partner in SoundHound’s world.   It has been in the process of expanding its market by setting up partnerships with popular restaurant brands, automakers, and hospitality companies to provide AI voice customer solutions.

Voice-enabled units in the automobile sector are expected to grow to 70% of shipments by 2026, which represents a significant opportunity. 

Analysts note that SoundHound has also made important headway within the restaurant industry, recently adding White Castle, Krispy Kreme, and Jersey Mike’s to its growing list of customers.

SoundHound’s expansion into other companies should continue to grow as major players such as McDonald’s, DoorDash, and Wendy’s hunt for ways to expand AI voice use.  We could see an $11 billion market when we factor in immediate opportunities from quick-service restaurants and original equipment manufacturers.

In short, the future looks bright for SoundHoundAI.

But there could be some bumps in the road on the way to profitability.  Uncertainty is often the case in the early stages of product adoption in relation to the pace of revenue growth and profitability.

But analysts believe that longer-term financial and operating benefits will outweigh profitability headwinds.  The general recommendation is to continue accumulating SOUN shares ahead of stronger operating results.

 

 

 

 

Cheers,

Jacquie