SoundHound AI vs. BigBear.ai: Which AI Stock Should You Invest In?

The stock market has seen significant volatility this year, influenced by macroeconomic conditions and tariff policies. Despite these challenges, the artificial intelligence (AI) sector continues to thrive, with notable growth in companies like SoundHound AI (SOUN) and BigBear.ai (BBAI).

SoundHound AI shares surged 127% over the past year, while BigBear.ai's stock rose 214%. These dramatic changes highlight the importance of understanding the current positions of these companies to make informed investment decisions.

Digging into SoundHound AI

SoundHound AI has built a robust AI capable of understanding human speech in 25 languages. The company started with a music recognition app and expanded into voice commands for cars, which has been adopted by automakers such as Stellantis. In 2024, SoundHound made strategic acquisitions, extending its reach into industries like restaurants, healthcare, and finance.

First-quarter revenue for SoundHound reached a record $29.1 million, representing 151% year-over-year growth. The company has a strong balance sheet with no debt and $587.5 million in assets, including $245.8 million in cash and equivalents. CEO Keyvan Mohajer is optimistic about the future, stating, 'Our pipeline is the largest it's ever been, and our TAM continues to expand, giving us confidence that we have a massive opportunity to significantly grow our business for years to come.'

SoundHound forecasts full-year 2025 revenue to reach between $157 million and $177 million, a substantial increase from 2024's $84.7 million.

A Look into BigBear.ai

BigBear.ai began 2025 with a new CEO, Kevin McAleenan, who focused the company on applying AI to critical infrastructure and national security issues. The company's technology has been adopted by the U.S. Department of Defense, London Heathrow and Dallas Fort Worth airports, and shipbuilder Austal.

BigBear.ai's Q1 revenue grew 5% year over year to $34.8 million. The company anticipates full-year 2025 revenue to increase to between $160 million and $180 million, up from $158.2 million in 2024. However, BigBear.ai is not profitable, with an operating loss of $21.2 million in Q1 due to increased operating expenses.

Choosing Between SoundHound AI and BigBear.ai

When deciding between SoundHound AI and BigBear.ai, stock valuation is a crucial factor. SoundHound's price-to-sales (P/S) ratio has decreased from its sky-high valuation at the start of the year but remains higher than BigBear.ai's. SoundHound's P/S ratio is also higher than AI leader Nvidia's P/S ratio of 24, suggesting that SoundHound shares may be overpriced, making BigBear.ai the better value.

However, BigBear.ai's 5% year-over-year revenue growth in Q1 is underwhelming for a business in the AI market. The company's mediocre sales growth does not bode well for its ability to reach profitability. BigBear.ai's Q1 balance sheet shows over $100 million of its $198.5 million in total liabilities as debt, with total assets at $396.3 million.

In contrast, SoundHound's strong sales growth and healthy balance sheet make it a more attractive investment. CFO Nitesh Sharan stated, 'We remain committed to our path to profitability and expect to achieve adjusted EBITDA profitability by the end of 2025.'

For these reasons, SoundHound AI is the better AI investment for the long term. However, due to its elevated stock valuation, you may want to wait for the share price to drop before deciding to buy.

SoundHound's strong financials and growth prospects position it as a leading player in the AI market.