SoundHound AI Inc., which has seen its stock price skyrocket this year, is well positioned to tap in to a massive artificial intelligence spending wave over the next few years, according to Wedbush.

SoundHound AI shares jumped 12% in morning trading on Wednesday, hitting a new high.

In a note released Sunday, Wedbush raised its price target on SoundHound’s stock to $22 from $10, with analyst Dan Ives noting the company’s “demand mojo” and “solid AI driven momentum” heading into 2025. Wedbush maintained its outperform rating for SoundHound, which provides voice-technology software powered by AI.

“In our opinion SoundHound represents an underappreciated pure-play AI company that is taking significant strides in taking share across the landscape with its enterprise AI software platform seeing continued strength with its expanding TAM [total addressable market] as the company starts expanding its growth trajectory in 2025,” the analyst added.

The stock has soared nearly 900% this year.

SoundHound, which went public in April 2022 and has yet to report a quarterly profit, is in the early stages of capitalizing on its growth initiatives with enterprise AI demand just starting, according to Wedbush’s Ives.

The AI spending wave represents a potential $1 trillion opportunity for the overall industry in the coming years, he added.

“We believe that [SoundHound] is a long-term winner in the AI revolution as the innovative tech stack provides various use cases for chat AI integrations across its three pillars (automotive, restaurants, e-commerce) while generating traction for its recurring revenue software model,” wrote Ives, in the note.

That will further improve the company’s position across voice and conversational AI while expanding to new verticals and improving its monetization capabilities, the analyst said.

In November SoundHound reported record third-quarter revenue and upped its revenue forecast for the year, citing efforts to broaden its target markets. But that record revenue of $25.1 million was just a fraction of the $35.08 billion in revenue Nvidia reported in the same quarter.

Meanwhile, Nvidia is an investor in SoundHound as well as a partner. The latest filings show that Nvidia owned 1.73 million SoundHound shares at the end of the third quarter, or about 0.5% of the shares outstanding.

At the Consumer Electronics Show in Las Vegas next month, SoundHound plans to demonstrate its collaboration with Nvidia to integrate large language model (LLM) capabilities into the chipmaker’s Drive AGX platform.

“This edge device solution enables automakers to enhance the in-car experience by bringing the intelligence of cloud-based LLMs directly to vehicles,” SoundHound said in a statement.

Wedbush’s Ives also noted that SoundHound’s new Polaris LLM is now in production. Polaris “learns faster by digesting data quickly with multi-lingual tools necessary to help SOUN develop stronger relationships with enterprises,” he wrote.

Of seven analysts surveyed by FactSet, five have an overweight or buy rating, and two have a hold rating for SoundHound.