Another day, another AI teaser pitch. Everyone wants to get aboard and find their piece of the massive stock price gains that we’ve seen in the past few months… and might see, if this mania really explodes into a historic stock price bubble in the year to come.

OK, yes, some people say we’re already at the peak of the AI bubble… but the world is changing fast these days, and we’re all curious about what the next big winner will be. So we’re curious, naturally, to hear what the pundits are pitching.

This time out we hear from Jason Williams, who helms the Future Giants service at Angel Publishing ($1,999 for the first year, renews at ?, 90-day refund period) and is dangling a special report called “Tiny AI Stock with 5,300% Upside” as bait to lure potential subscribers.

Here’s how he makes the pitch on the order form:

“It’s bigger than a chatbot like ChatGPT… It’s bigger than a search engine.

“This AI tech will be adopted by 94% of corporations, 9 in 10 vehicles, and 80% of hospitals. No industry will escape disruption.

“Conversational AI has been called the “Holy Grail of AI” and it’s why Google, Apple, and Amazon have invested billions in the space…

“It’s why Bill Gates invested $20 billion — double what he put into ChatGPT creator OpenAI.

“But so far, their efforts have all fallen short.

“What they needed was the capabilities of something like ChatGPT but a more human way of interaction… and all done by speaking.

“One innovation is light-years ahead of everyone in achieving this… and that’s why it’s entering drive-throughs, hospitals, cars, and call centers worldwide.

“It’s even about to upgrade chatbots like ChatGPT to the next level!”

What else do we learn about the stock? A few clues:

“… the company with 264 patents for this technology isn’t Nvidia, AMD, or Adobe.

“It’s hardly known, just began publicly trading, and trades for only $2 a share.

“For all the reasons you’ve already seen, that shouldn’t last for much longer.

“Taking Bill Gates’ $20 billion buyout as a measure, this company could soar 5,300% in the near term.”

That’s a reference to Microsoft’s acquisition of Nuance a couple years ago, which was indeed a $20 billion buyout of the speech recognition pioneer (though speech recognition had become so commoditized by then that Nuance was really focused on medical transcription, and Microsoft reportedly really wanted it for its Nuance Healthcare Cloud service).

Other clues? It trades on the NY Stock Exchange, so this isn’t some obscure Canadian venture or pink sheets stock.

And we’re told that it has a new AI product available now…

“The company just announced a new software that takes ChatGPT….

“And upgrades this tech’s applications to automotive, health care, hospitality, financial services, Internet of Things, and e-commerce.

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“Bank of America says it’s ‘a defining moment — like the internet in the ‘90s — where it is moving towards mass adoption.'”

That Bank of America quote has been widely cited of late, it’s just an analyst note about AI being at an ‘iPhone moment’ of mass adoption, similar to what lots of other folks have been saying since the release of ChatGPT late last year — so that’s not a quote specifically about our “secret” company.

Anything else?

We get a little history of the teased company:

“In 2017, this company’s market valuation was $830 million.

“This was in its pre-IPO stage, when it was only available to institutional investors and funds that got first dibs on the company when it was at its cheapest…

“Since that time, this firm has built up a large blue-chip roster…

“Including Mastercard, Netflix, Snapchat, Mercedes-Benz, Honda, Hyundai, Qualcomm, and Samsung.

“It scaled its technology to tens of millions of devices…

“Reached two billion annual search queries…

“And nearly tripled its revenue in that time.

“So you’d imagine that it would be worth billions of dollars now, right?

“Wrong.

“Its market cap is actually a mere $400 million…”

And he fleshes out that reference the Nuance takeover by Microsoft in 2021…

“In 2021, Microsoft bought a speech AI company for $20 billion…

“At the time, it was the biggest acquisition in the tech giant’s history.

“And it was the first step in its next and biggest move in the AI space: ChatGPT.

“But I’ve done a comparison of the two technologies…

“And their speech AI tech PALES in comparison to that of the company I want to share with you today.

“No competitor is even five years as close to what it has achieved.

“It’s why it now has TWO BILLION search queries each year.

“Even more incredibly, this company’s market cap is a mere $375 million.

“In other words, it would have to rise 5,300% just to equal Microsoft’s buyout price…”

So what’s the stock?

Thinkolator sez that although this ad is undated, and it just showed up in our inbox today, it must be a couple months old… because what is teased as a $2 company is now…a $3 company. This is another pitch for Soundhound AI (SOUN), which has gotten a little bit of a boost from the AI mania of late, it’s now a $700 million company (it was down below $400 million in late March, and fell below $200 million at the end of last year).

The last time we saw this pitched was when Ross Givens touted it as a $3 AI Wonder Stock about six weeks ago, here’s what I said at the time:

SoundHound AI is the company behind Houndify, a voice assistant platform that is being pitched as “better than Alexa” and partnering with lots of companies to build in voice assistant/generative AI assistance. They were a busted SPAC, and have had to go back for more funding (including a $100 million term loan last month that sounded like an expensive lifeline), and they haven’t really proven up the scalability of their business model yet, with costs rising dramatically faster than revenue so far, but they claim to have a huge backlog of potential orders.

I went into more depth on their shift from “making a better Alexa” to “partnering with automakers” in that article last month, and won’t bore you by repeating it here, but the general sense was that their technology still sounds cool and their partnerships are impressive… but they haven’t turned that into real revenue just yet, and the rescue financing they got a few months ago came at a high cost. We hadn’t yet gotten their first quarter update when I wrote that previous article, though, so did that change anything?

Not really. Their revenue is still pretty marginal, and they reaffirmed their guidance for $43-50 million in revenue this year, (so there was no shocking rise in demand, like we saw with NVIDIA last quarter). They still expect to be “adjusted EBITDA positive” at the end of 2023, and my guess would mean that the word “adjusted” is carrying a lot of water in that sentence.

But they are an AI-related company, so one never knows where the mania will lead… and voice assistants are a real business, though it’s probably always going to be a challenge to go up against Alexa and Siri. Here’s what Eric Savitz said about SOUN’s earnings in a Barron’s article last month:

“SoundHound has been taking steps in recent months to improve its financial position. In January, the company raised $25 million through a private placement of preferred shares. A few weeks before that, SoundHound announced a corporate restructuring plan intended to accelerate its path to profitability, reducing costs by 40% with a similar-sized staff reduction.

“[CEO Keyvan] Mohajer says the market’s recent fascination with AI software ‘has been one of the best things that’s ever happened to us.’ He says that this is one of the rare moments in the history of technology business that huge demand intersects with technology readiness. He contrasts the AI trend with autonomous vehicles, where there is plenty of demand, but the technology isn’t quite ready, and virtual reality, where the technology works, but ‘people don’t really want it yet.’

“Mohajer says that enabling conversational AI ‘has been my life’s passion for over 20 years,’ beginning with the start of graduate school at Stanford in 2000. Mohajer says he spent some time thinking about the various ‘technologies’ included in Star Trek, and which ones were actually viable. ‘The one I thought was actually viable in my lifetime was voice AI’ he says. Mohajer started the company from his Stanford dorm room, but stayed on to finish his degree.

“Mohajer’s view is that ‘every product should have a voice AI assistant.’

“In announcing earnings, the company also said it is getting ready to launch its own audio chatbot, which will be offered both as a service to customers and as a stand-alone consumer digital assistant service. It should be a revved up version of Hound, a more simplistic voice-based digital assistant that is already available to download from the App Store.

“He says the new service will pull information from a variety of large models, including small-business information from Yelp and navigation information from the mapping company Here, as well as broader generative AI models, potentially including Open AI. Exact timing for the new service, and how the company plans to make money from it, will be disclosed later this year.”

So… will Soundhound be able to ride the wave of AI enthusiasm to launch a new product and “level up” their business to some sustainable level of revenue?

Um, I don’t know. They’re still tiny, they’re still financially fragile, but they’re restructuring to make themselves a little less fragile, they’re hoping to push through to burning less cash this year, and they see things picking up in in the latter part of 2023. It’s always dangerous to bet too much on those profits that you can sort of see out beyond the horizon… but who knows, maybe they’ll reach a commercial breakthrough, or speed up some of their partnerships, and will become a market darling once more. We’ll see how it goes.

But wait, there’s more! Williams talks up two other special reports about teensy little stocks that he thinks will be winners…

“Plus, you’ll hear about two other unknown firms that are set to become the new FAANG stocks…

“The future tech dominators that will replace current Big Tech…

“And build trillion-dollar market caps from practically the bottom.

“When I say unknown, I mean these are off-the-radar stocks for 99% of investors.

“I would wager that not 1 in 100 investors even knows they exist…

“Yet they might have the most upside available in the markets today.

“I’m talking about legitimate 100-bagger potential in the coming years.”

So what are those stocks? The first one is a repeat of his pitch for the “Newton Battery,” which is basically a company that uses towers and weights to store electricity. I covered that “Newton Battery” tease about a year ago, when Williams started promoting it, so it sounds like he’s just using it as a rerun to give you a bonus “special report.”

What has happened since he started promoting that “Newton Battery” company? Well, here’s the stock chart for it, that’s a company called Energy Vault Holdings (NRGV)… it was, like Soundhound, a company that came public through a SPAC… and then collapsed. Williams was pitching it in the $10-15 range, and it’s now down below $3.

Energy Vault is still burning through cash, though they do at least have a little bit of revenue now. And there are a few analysts who think they’ll more than double their revenue this year, and double it again in 2024 — if that happens they will probably have enough cash to get through to break-even in 2025 or 2026. Those analysts also still call it a “buy”, as they have done ever since it completed its SPAC merger and all the way down from $15, so I’m actively trying to avoid skeptically assuming that those analysts are just vying for their banks to be the ones who get chosen to help NRGV raise money next time.

Nope, can’t do it. Still skeptical. But at a $400 million market cap, with 100 million in cash and some of their construction spending prepaid, it at least looks a lot better than it did at $15 in the Spring of 2022. You’ll have to check out their latest investor presentation if you want to try to talk yourself into drinking the Kool-ade.

And the other one? That’s a special report called, “Landfill Warrior: The Tiny Tech Firm Conquering
the $1.5 Trillion Food Waste Crisis.”

From the ad:

“By 2025, food waste is expected to nearly double to 2.2 billion tons a year.

“And there’s only ONE company on the market with the solution to this rising food waste problem.

“Its proprietary processing tech converts food waste into a number of viable energy sources, including:

• Clean electricity — a global market worth $1.1 trillion by 2027.
• Natural gas — predicted to be a $758 billion industry by 2025.
• Organic fertilizer — forecast to be a $17 billion market by 2026.
• And more…

“This company is taking materials that typically end up in landfills…

“And turning them into profit opportunities that span a host of billion- and trillion-dollar industries.”

Then a pretty wild claim…

“… we can’t end the food waste crisis without this firm’s incredible technology.

“You can see how this firm is another future giant in the making.

“Its market cap is only $22 million.

“But in the coming months, I think that number will rise exponentially.”

Why is it going to go up? Apparently it’s about to make tons of organic fertilizer…

“… it just bought a 40,000-square-foot facility…

“And it has the capacity to make $2 million worth of organic fertilizer a day.

“In one year, that facility alone could generate $730 million.

“That would be a stunning 3,218% jump in just a single year.”

This is one I don’t think I’ve ever looked at before, Thinkolator sez our little “Landfill Warrior” is Susglobal Energy (SNRG), which was roughly a $20-25 million company for most of the past couple years but has recently bumped up to $44 million, at a share price of about 36 cents.

So this is a genuine penny stock, they’ve been around for about five years and have never really had any meaningful revenue. Here’s how they describe themselves:

“SusGlobal Energy Corp., the developer of SusGro™, an award winning and revolutionary pathogen free organic liquid fertilizer, is an environmental, agricultural, industrial biotechnology and renewables company focused on acquiring, developing, and monetizing a portfolio of proprietary technologies in the waste to energy and regenerative product applications globally. It is management’s objective to grow SusGlobal into a significant sustainable waste to energy and regenerative products provider and a trusted brand for the fertilizer, soil and aquaculture market, as LEADERS IN THE CIRCULAR ECONOMY®.”

They’ve got a couple projects in Ontario, one of which is apparently operational (in Hamilton), and they sell a bit of their organic fertilizer each quarter… and they have a “coming soon” site in Florida.

Honestly, my first reaction was, “how is this little trash company even public.” They’ve been posting revenue of about $1 million a year, on average, for about five years now, and have consistently lost at least $2-3 million a year from their existing business. Maybe these new facilities will somehow turn that around, but I can’t imagine wanting to invest in a tiny waste-management operation like this unless I were on the board of directors and watching exactly what they do every day. They’ve got land and buildings and construction in progress that are worth a total of $9 million, they say, and they have about $17 million in debt backing up those projects. I haven’t checked into their filings to see if they’ve raised any money since last quarter, but as of the end of March they were skint — they were down to about $6,000 in cash and had almost $6 million in payables, so if they haven’t been raising money yet, I have to imagine they’re planning to.

Maybe there’s something brilliant in there, but I don’t see it. If you have reason to be optimistic about Susglobal’s prospects, feel free to let us know why with a comment below.

And, of course, I can only tell you what I’m doing with my money, and in the case of these three companies that’s “keeping it in my wallet,” but when it comes to your money, you get to make the call… we’d love to hear your thoughts on any of today’s small-cap pitches from Jason Williams, the friendly little comment box awaits your words below. Thanks for reading!

Disclosure: Of the companies mentioned above, I own shares of Amazon, Google parent Alphabet, and NVIDIA. I will not trade in any covered stock for at least three days after publication, per Stock Gumshoe’s trading rules.