To The Moon

Though the term “Nvidia Concept Momentum" is not a formally recognized financial or technical term. but it has used by many in the investment community to describe the positive market sentiment and stock price movement of companies that are perceived to be closely aligned with or benefiting from Nvidia's dominance in the AI and GPU market.

This "momentum" is often driven by a narrative of a company being a key partner, customer, or a beneficiary of the broader AI trend that Nvidia is leading.

The reason this "concept momentum" seems to work for $SoundHound AI Inc(SOUN)$ but not $C3.ai, Inc.(AI)$ can be attributed to several factors related to their specific businesses and their relationship with Nvidia.

SoundHound AI and the Nvidia Narrative

SoundHound's business is centered on voice artificial intelligence and conversational AI. The company has a well-documented and expanding collaboration with Nvidia, which directly links its technology to Nvidia's hardware and software ecosystem.

• Direct Product Integration: SoundHound has integrated its voice AI technology with Nvidia's platforms, such as Nvidia AI Enterprise and the Nvidia Drive platform for automotive use. This means SoundHound's products are literally running on Nvidia's technology. This direct, tangible integration makes it easy for investors to connect SoundHound's success with Nvidia's.

• Clear Use Cases: The collaboration has clear and compelling use cases, such as in-car voice assistants and real-time AI responses that don't require an internet connection. These are easy for investors to understand and envision as a significant part of the future of AI.

• Small Cap, High Growth Potential: SoundHound AI is a smaller company with a higher growth rate. This makes it more susceptible to "concept momentum" because a partnership with a giant like Nvidia can have a disproportionately large impact on its perceived value and future prospects. It's seen as a high-risk, high-reward play on the AI trend.

C3.ai and the Lack of a Stronger Narrative

While C3.ai is a pure-play enterprise AI company and has partnerships with other tech giants like Microsoft and Google Cloud, its connection to the Nvidia narrative is less direct and compelling from a momentum perspective.

• Different Business Model: C3.ai focuses on providing an enterprise AI software platform for large-scale, complex applications. Its customer base includes a diverse range of industries like oil and gas and government. While it uses AI, it's not as closely tied to the specific hardware and consumer-facing applications that are currently driving the Nvidia narrative.

• Broader Partnerships: C3.ai has a wide range of partnerships, which, while beneficial for its business, dilutes the "Nvidia-centric" story. It's not seen as solely an Nvidia partner, but rather as a platform that works with many different providers.

• Slower Growth and Higher Valuation Concerns: C3.ai's growth rate, while still healthy, has been slower than SoundHound's. Furthermore, its stock has been subject to concerns about profitability and valuation, which can counteract any positive momentum from a partnership. The company's larger size and different business model make it less of a speculative "pure-play" on the Nvidia trend compared to SoundHound.

The divergence in how Nvidia Concept Momentum plays out for SoundHound AI versus C3.ai boils down to strategic alignment, product-market fit, and infrastructure leverage.

In the next section we will looked at the breakdown of the factors.

Why It Works for SoundHound AI

1. Deep Integration with Nvidia’s AI Stack

• SoundHound has embedded Nvidia AI Enterprise, including NeMo and NIM microservices, into its voice AI platform.

• This enables low-latency inference, real-time retrieval-augmented generation (RAG), and scalable model optimization—perfect for edge deployments like automotive and restaurants.

2. Edge AI Advantage

• SoundHound’s on-chip voice AI runs on Nvidia DRIVE AGX, allowing generative AI responses without cloud connectivity.

• This is a game-changer for in-vehicle experiences and voice commerce, aligning tightly with Nvidia’s push into edge AI.

3. Strategic Visibility and Momentum

• Nvidia made a direct investment in SoundHound and showcased it at CES and GTC, giving it credibility and visibility.

• Wedbush raised its price target, citing SoundHound’s ability to capitalize on Nvidia’s ecosystem and its 74% projected revenue growth.

Why It Does Not Translate for C3.ai

1. Misaligned Infrastructure Focus

• C3.ai is primarily an enterprise AI software provider, focused on predictive analytics and digital transformation for large organizations.

• It doesn’t leverage Nvidia’s hardware-accelerated edge AI or real-time inference microservices in the same way SoundHound does.

2. Lack of Direct Integration or Showcase

• There’s no evidence of C3.ai being featured in Nvidia’s flagship demos or receiving direct investment or co-development spotlight.

• While Nvidia’s ecosystem is booming, C3.ai hasn’t positioned itself as a core infrastructure partner.

3. Financial and Execution Overhang

• C3.ai continues to face operating losses, free cash flow challenges, and a CEO transition amid execution risks.

• Despite AI tailwinds, its revenue growth is modest (~21.5% CAGR projected to 2028) and lacks the explosive upside seen in SoundHound.

Strategic Takeaway

Nvidia Concept Momentum favors companies that:

• Build real-time, edge-deployable AI solutions.

• Integrate deeply with Nvidia’s software stack (NeMo, NIM, DRIVE).

• Deliver visible, scalable use cases in high-growth verticals like automotive, voice commerce, and smart assistants.

SoundHound checks all those boxes. C3.ai, while promising in enterprise AI, hasn’t yet aligned its infrastructure or narrative to ride Nvidia’s wave.

How This Divergence Could Impact Sector Rotation Or Thematic ETF Exposures?

I think before we make a decision whether we could continue to chase this Nvidia concept momentum, I think we might want to look at how the Nvidia concept momentum divergence between SoundHound AI and C3.ai could ripple through sector rotation and thematic ETF exposures.

In the next section we will be sharing how we have architect a multi-layered model to capture how the Nvidia Concept Momentum divergence between SoundHound AI and C3.ai could ripple through sector rotation and thematic ETF exposures.

Framework Overview

Step 1: Stock Bucketing

Nvidia-Aligned AI Infra Beneficiaries

• SoundHound AI (SOUN)

• Symbotic (SYM)

• Recursion Pharma (RXRX)

• Supermicro (SMCI)

• Axcelis (ACLS)

Enterprise AI Laggards

• C3.ai (AI)

• Palantir (PLTR) (partially aligned but cloud-heavy)

• BigBear.ai (BBAI)

Step 2: ETF Exposure Mapping

Step 3: Sector Rotation Simulation

Here we would be sharing how we simulate how macro regimes affect these exposures, because we have seen how macro regimes could have significant impact.

Regime: Falling Rates + Fiscal Expansion + Low VIX

• Growth sectors (Tech, AI Infra) outperform

• Nvidia-aligned plays (SOUN, SYM, $SUPER MICRO COMPUTER INC(SMCI)$ ) surge

• ETFs like ARKQ, BOTZ, and IRBO gain momentum

Regime: Rising Rates + Tight Liquidity + High VIX

• Enterprise AI faces margin pressure

• C3.ai, $Palantir Technologies Inc.(PLTR)$ underperform

• Defensive rotation favors low-volatility ETFs (e.g., THNQ may hold better than ARKQ)

Step 4: Return Cone Visualization (Conceptual)

We can model return cones for ETF clusters under different macro scenarios:

• BOTZ / ARKQ: Wider upside cone in Nvidia-aligned regime, higher convexity

• THNQ / AIQ: Narrower cone, lower volatility, more muted upside

• IRBO: Balanced cone, moderate upside, diversified exposure

Next, we have build a dashboard to allow us to see how these above cones would look like.

Dashboard Highlights

Return Cones: Nvidia-Aligned vs Enterprise AI

• Top Panel: Nvidia-aligned AI infra stocks (e.g., NVDA, SMCI, AMD) show wider upside cones, reflecting higher momentum and macro tailwind sensitivity.

• Bottom Panel: Enterprise AI laggards (e.g., IBM, ORCL, CRM) display narrower cones, suggesting muted upside and higher macro vulnerability.

This visual confirms the convexity advantage of Nvidia-aligned plays under growth-friendly regimes.

Rotation Heatmap: Momentum vs Volatility

Rotation Heatmap

• High Momentum + Moderate Volatility: SMCI, NVDA, ANET — prime asymmetric setups.

• Low Momentum + High Volatility: CRM, SAP — caution zones under macro stress.

This heatmap helps isolate rotation candidates with favorable risk/reward profiles.

Technical Scores Snapshot

NVDA and SMCI show strong RSI and MACD signals, reinforcing bullish setups.

Final Note

From what we have modelled, it looks like this might not be the right time yet to chase the Nvidia Concept Momentum, as we can see that Nvidia-aligned AI infra stocks (e.g., NVDA, SMCI, AMD) continue to show wider upside cones, reflecting higher momentum and macro tailwind sensitivity but Enterprise AI laggards (e.g., IBM, ORCL, CRM) display narrower cones, suggesting muted upside and higher macro vulnerability.

And on the momentum vs volatility for rotation, we are seeing low momentum but high volatiltiy for AI software stocks like CRM and SAP.

Summary

"Nvidia Concept Momentum" is not about a company's fundamental value alone, but about its ability to fit into a popular and powerful narrative.

SoundHound AI's direct product integration and clear, exciting use cases with Nvidia's platforms make it a much better fit for this narrative than C3.ai, whose business is more diversified and less directly tied to Nvidia's core hardware story.

So from what we have seen with the model, we could be seeing a mixed performance for Nvidia Concept Momentum, hence, as investors we need to look out for high momentum with at least moderate volatility like $Arista Networks(ANET)$.

Nvidia Concept Momentum favors companies that:

• Build real-time, edge-deployable AI solutions.

• Integrate deeply with Nvidia’s software stack (NeMo, NIM, DRIVE).

• Deliver visible, scalable use cases in high-growth verticals like automotive, voice commerce, and smart assistants.

Appreciate if you could share your thoughts in the comment section whether you think we can still chase Nvidia Concept momentum stocks but we need to look at stocks with high momentum with only moderate volatility.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.