Shares of SoundHound rival Cerence surge on Nvidia collaboration

Cerence, a vendor of voice-recognition software and a rival of retail trading favorite SoundHound AI, has seen its shares go vertical in recent days since issuing a jargon-laden press release announcing an “expanded collaboration with Nvidia” to enhance its AI voice software for use in cars.

Based on the press release, it’s hard to determine exactly what’s going on here. What does Cerence mean by collaboration? Are they merely using Nvidia products? If so, why is this considered revolutionary for the company? (Perhaps it just means Cerence’s software will perform better.)

At any rate, the mood of the market is such that the mere mention of Nvidia seems to be sufficient justification for a massive stock move. Cerence shares are up 160% over the last two trading sessions.

For the record, SoundHound’s market romp over the last year — it’s up 900% over the last 12 months — was also triggered by proximity to Nvidia, after the chip giant disclosed that it had a small stake in the company last February. According to FactSet Nvidia owns roughly 0.5% of SoundHound’s shares outstanding and is the company’s 10th largest shareholder.