SOUN or BBAI: Which AI Stock is a Better Buy for Investors?

As AI reshapes industries, small-cap players like SoundHound and BigBear.ai are increasingly capturing investor interest.

Artificial intelligence (AI) continues to be a major investment trend, with even smaller companies gaining attention. Two such players, SoundHound AI (SOUN) and BigBear.ai (BBAI), are turning heads with their innovative AI strategies. But which stock currently offers the stronger long-term growth potential? Let’s take a closer look.

For context, SoundHound AI specializes in voice recognition and natural language processing, offering AI-driven solutions across industries. Meanwhile, BigBear.ai provides data-driven decision intelligence solutions, primarily to the U.S. defense, intelligence, and government sectors.

Is SOUN Stock a Good Buy?

SOUN stock jumped more than 200% over the past year but has been bumpy, dropping 18% year-to-date, showing the risks of its fast rise. Among the two players, SoundHound stands out with record revenue growth, solid enterprise and automotive partnerships, no debt, and over a $1 billion backlog of bookings.

Recently, the company acquired Interactions, an AI-driven customer service and workflow tools firm, for $60 million in cash. The acquisition is expected to boost operating profits immediately, with possible additional payments linked to revenue targets. It also brings several major brands into the company’s client portfolio.

Looking ahead, the recent surge in SoundHound’s share price has pushed it close to or above average analyst targets, making short-term gains less clear. Still, the stock may appeal to long-term growth investors. Anyone considering buying should be ready for potential short-term swings as the company pursues larger market opportunities.

Is BigBear.ai a Good Stock to Buy?

In contrast, BigBear.ai has seen an even sharper rally, climbing more than 300% over the past year and up 54% so far in 2025. However, its financial performance lags behind SoundHound. BigBear.ai’s Q2 revenue went down 18% year-over-year, and an adjusted loss of $0.71 per share missed the consensus estimate of a $0.06 loss.

On the upside, BigBear.ai has a strong niche in national security and defense, with its AI software used in U.S. Navy submarine projects and airport facial recognition, giving it solid government ties. Yet reliance on federal contracts carries risks, as political shifts and budget changes could impact deals.

Despite a $385 million backlog as of March 31, 2025, ongoing cash burn, slow contract execution, and market volatility make BigBear.ai a high-risk, high-reward investment.

SOUN or BBAI: Which Stock Offers Higher Upside, According to Analysts?

Using TipRanks’ Stock Comparison Tool, we compared SOUN and BBAI to see which AI stock analysts favor. Both carry a Moderate Buy rating. SOUN stock has a price target of $15.33, implying a downside of 5.6%, while BBAI’s stock price target of $5.75 implies a downside of over 15%.

Conclusion

Both SoundHound and BigBear.ai are attracting investor attention as they compete to become leading AI stocks. SoundHound stands out with strong revenue growth and solid long-term potential, while BigBear.ai faces challenges from weaker financials and reliance on government contracts.

In the short term, both stocks carry risk, as their significant gains over the past 12 months could lead to volatility and pullbacks.