Artificial intelligence (AI) is still one of the most exciting investment themes of the decade. Two such companies, SoundHound AI (SOUN) and BigBear.ai (BBAI), have made headlines with their AI strategies. But which stock offers better upside potential for investors?
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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. SOUN stock surged over 100% in the past year, while BigBear.ai delivered an even steeper rally with a 350% gain. However, both stocks have since faced sharp volatility, highlighting the risks that come with their rapid rise.
Is SOUN a Good Stock to Buy?
Amid the AI boom, SoundHound stands out with rapid revenue growth, strong enterprise and automotive partnerships and low debt. The company’s key clients include Chipotle (CMG) and Mercedes-Benz (MBGAF).
But what sets SoundHound apart is its independent AI platform, which gives customers more control than relying on big tech companies. Still, if the economy slows down, big clients like carmakers and restaurants might cut back on tech spending, which could reduce demand for SoundHound’s services.
SoundHound could still attract long-term growth investors. However, anyone buying the stock should be prepared for short-term ups and downs as the company works toward bigger market opportunities.
Is BigBear.ai a Good Stock to Buy?
In contrast, BigBear.ai isn’t growing as quickly as SoundHound, but it has a niche focus on national security and defense. Its AI software is used in areas like U.S. Navy submarine building and airport facial recognition, giving it solid ties with the U.S. government.
In the first quarter of 2025, BigBear.ai reported $34.8 million in revenue, up 5% from a year earlier. For the full year, it expects revenue between $160 million and $180 million, reflecting slow but steady progress. However, the company struggles with ongoing losses and cash burn. Notably, BigBear.ai expects to post an adjusted EBITDA loss in the low single-digit millions in 2025.
Interestingly, BigBear.ai’s reliance on government contracts can be a mixed blessing. While the company boasts a growing $385 million backlog as of March 31, 2025, these deals are vulnerable to political changes and shifting federal budgets. Overall, continued cash burn, slow-moving contracts, and market volatility make BigBear.ai a high-risk, high-reward option.
SOUN or BBAI: Which Stock Offers Higher Upside, According to Analysts?
Using TipRanks’ Stock Comparison Tool, we compared SOUN and BBAI to see which small-cap AI stock analysts favor. Both carry a Moderate Buy rating. SOUN stock has a price target of $11.50, implying more than 7% gain, while BBAI’s stock price target of $5.83 implies a downside of over 11%.
