MW SoundHound's stock sinks as Nvidia sells off stake. What comes next?

By Emily Bary

Nvidia's latest 13-F filing also indicates it sold its stake in Serve Robotics, and shares of the self-driving technology company are also sliding

Many investors hadn't heard of SoundHound AI Inc. before a year ago, when Nvidia Corp. filed its first 13-F form, which showed a position in the maker of voice-based artificial-intelligence technology.

SoundHound shares (SOUN) surged some 570% in the year through Thursday's close, as investors took a closer look at the company's potential to win more AI partnerships.

From the archives (February 2024): Nvidia discloses positions in SoundHound AI, Arm - and these other stocks

But the shares are falling 23% in Friday morning action after Nvidia's $(NVDA)$ latest 13-F no longer showed a position in SoundHound as of the end of the December quarter.

Nvidia declined to comment on the filing. SoundHound didn't immediately respond to MarketWatch's request for comment.

Quarterly 13-F forms are required for investors that "exercise investment discretion over $100 million," according to the Securities and Exchange Commission. While these forms typically come from professional investment managers, they can also come from companies that hold significant investments in public companies.

Nvidia owned 1.7 million shares of SoundHound, valued at just over $8 million, as of its September 13-F.

Though SoundHound's stock is down following the latest filing, the company could continue to capture investor attention even without the Nvidia tie. SoundHound is expected to post $84 million in revenue for 2024 but was valued at $5.6 billion prior to Friday's selloff, suggesting the stock has become a broader speculative bet on future AI winners.

Wedbush analyst Daniel Ives called SoundHound "a long-term winner in the AI revolution" in a note to clients last December.

See also: SoundHound diversifies its business beyond cars, but the hot AI stock retreats

Nvidia also owned 3.7 million shares of Serve Robotics Inc. (SERV), a maker of self-driving delivery technology, which were valued at $29.6 million at the end of the September quarter. That position is gone as well from Nvidia's latest 13-F for December.

Serve Robotics shares are taking an even steeper Friday morning dive, off 38%. Nvidia's Serve position represented 8.4% of the shares outstanding, and Nvidia was the second-largest shareholder, behind Uber Technologies Inc. $(UBER)$, according to FactSet data.

Serve Robotics didn't immediately respond to a MarketWatch request for comment.

-Emily Bary

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February 14, 2025 09:41 ET (14:41 GMT)

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