As interest in artificial intelligence (AI) continues to grow, investors are looking for opportunities in AI-focused small-cap stocks. SoundHound AI (SOUN) and C3.ai (AI) have both gained attention, but which offers the better investment potential? This article breaks down their recent performance, growth prospects, and risks to help investors decide.
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For context, SoundHound AI specializes in voice recognition and natural language processing, offering AI-driven solutions across industries. In comparison, C3.ai provides AI software and tools that help businesses work more efficiently, leverage data effectively, and optimize operations.
On the stock front, SOUN stock surged over 80% in the past year but has been volatile and is down about 41% so far in 2025. Meanwhile, C3.ai stock is down nearly 60% year-to-date.
Is SOUN a Good Stock to Buy?
SoundHound has recently been in the spotlight following its Q3 2025 results. The company posted Q3 revenue of $42 million, up 68% year-over-year. It also reported an adjusted net loss of $0.03 per share, marking an improvement from last year’s $0.04 loss.
Overall, SoundHound is benefiting from rising demand for voice AI and a growing customer base. While the company is not yet profitable, strong revenue growth and an improved outlook underscore its long-term potential. Looking ahead, the company raised its full-year revenue forecast to $165–$180 million, up from $160–$178 million.
On Wall Street, H.C. Wainwright’s analyst Scott Buck has the highest price target for SOUN at $26. Buck sees SoundHound moving toward profitability with expanding margins and a clear path to positive EBITDA. He is confident that as more industries adopt the company’s voice AI technology, SoundHound will scale operations, increase revenue, and steadily approach profitability.
Is C3.ai a Good Stock to Buy?
In contrast, C3.ai has had a difficult year. In the quarter ending July 31, the company reported an adjusted loss of $0.37 per share—more than double analysts’ estimates. It also posted a 19% year-over-year decline in revenue to $70.3 million. At the same time, the company withdrew its full-year financial forecast, citing a CEO change and a reorganization of its sales and service divisions. These setbacks have increased pressure on C3.ai to explore new strategic directions.
Earlier this month, Reuters reported that C3.ai is exploring the possibility of a sale.
On Wall Street, several analysts have issued Sell ratings on C3.ai and lowered their price targets. Many cite the company’s recent financial performance and revised outlook as reasons for their bearish outlook. Investors are awaiting more clarity on future guidance as the company prepares to release its Q2 results in early December.
SOUN or AI: Which Stock Offers Higher Upside, According to Analysts?
Using TipRanks’ Stock Comparison Tool, we compared SOUN and C3.ai to see which AI stock analysts favor. SOUN carries a Moderate Buy rating, while C3.ai has a Moderate Sell rating from analysts.
In terms of share price appreciation, SOUN stock offers higher growth potential of over 45% due to the recent decline in its stock. AI stock, on the other hand, has a price target of $14.80, implying a modest upside of 9.3%.
Conclusion
In conclusion, both SoundHound and C3.ai offer unique opportunities in the AI space. SOUN shows steady growth with a strong product lineup and a Moderate Buy rating, making it a relatively safer choice. In contrast, C3.ai faces financial challenges, appealing mainly to investors seeking a potential rebound.