In the ever-evolving world of artificial intelligence (AI) investments, Nvidia (NASDAQ: NVDA) remains at the forefront, driving innovation and influencing market trends. Recently, the tech giant made a surprising move by completely selling off its stake in SoundHound AI (NASDAQ: SOUN), raising questions among investors: Should they follow suit?
Nvidia’s 13F Filing Reveals Key Investment Moves
As per the latest 13F filings with the Securities and Exchange Commission (SEC), Nvidia currently holds stock in five public companies—Arm Holdings (NASDAQ: ARM), Applied Digital (NASDAQ: APLD), Recursion Pharmaceuticals (NASDAQ: RXRX), Nebius Group, and WeRide. However, SoundHound AI is no longer part of that list, as Nvidia has exited its position entirely.
While many investors look to 13F filings for insights into where institutional money is moving, it’s important to understand that not every buy or sell decision reflects a negative sentiment about a company. In Nvidia’s case, its decision to divest SoundHound AI likely stems from portfolio reallocation rather than concerns over the company’s future.
SoundHound AI: A Stock That Soared 400% in Three Months
SoundHound AI, a leader in voice recognition and conversational AI, has seen massive price momentum over the past few months. The stock surged nearly fivefold during the fourth quarter of 2024, catching the attention of both retail and institutional investors.
Despite this impressive rally, Nvidia’s exit suggests that it viewed the gains as an opportunity to take profits rather than a long-term strategic holding. The AI chipmaker’s stake of 1.7 million shares likely resulted in a cash-out of around $20 million to $30 million—an amount that is relatively insignificant for a company valued at over $3.4 trillion.
What Nvidia’s Exit Means for Investors
Does Nvidia’s move indicate trouble for SoundHound AI? Not necessarily. Institutional investors often rotate positions based on portfolio optimization, rather than a negative outlook on a specific stock. The key question for retail investors is whether SoundHound AI still has growth potential after its meteoric rise.
With AI adoption continuing to expand across industries, SoundHound AI remains a player in voice recognition technology. However, investors should assess valuation, revenue growth, and long-term competitive positioning before making their own decision.
Final Thoughts: Should You Sell SoundHound AI?
While Nvidia’s decision to sell SoundHound AI stock might raise eyebrows, it’s essential to analyze the company’s fundamentals rather than blindly following institutional moves. As the AI sector heats up, investors should stay informed and make data-driven investment decisions.
