SoundHound AI (SOUN) has quickly become a retail favorite in 2025, riding the same wave of excitement that once surrounded Palantir Technologies (PLTR). With SOUN’s stock experiencing sharp swings amid solid revenue growth, investors are asking: is this the next Palantir-like success story, or just another volatile AI bet?
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Both companies are part of the AI revolution, but business models and customer bases set them apart. On one hand, Palantir focuses on data-driven platforms and government contracts, while SoundHound specializes in fast-growing voice AI solutions. SOUN and PLTR have seen their shares increase by over 200% and 340%, respectively, in the past year.
PLTR and SOUN: The Similarities
Among the similarities, SoundHound AI and Palantir are high-growth tech disruptors. Like Palantir in its early years, SoundHound is targeting a huge market with a specialized AI platform that can scale across industries.
Notably, SoundHound posted its strongest quarter yet in Q2, with revenue up 217% year-over-year to $42.7 million and net loss narrowing to $0.03 per share. The company also lifted full-year guidance to $160–$178 million, slightly above prior estimates. Likewise, Palantir also impressed, surpassing the $1 billion quarterly revenue mark for the first time. It also lifted its full-year outlook, now projecting $4.142–$4.150 billion in revenue for 2025, up from its earlier forecast of $3.89–$3.90 billion.
Overall, both companies attract strong investor attention thanks to rapid revenue growth and their positioning as niche leaders in the broader AI ecosystem.
Valuation Risks in SOUN and PLTR
Both SOUN and PLTR trade at valuations that raise eyebrows among investors. SoundHound carries an extremely high forward price-to-sales ratio of 34.97, compared with the sector median of 3.24. While SOUN’s valuation is steep relative to its current revenue and size, it offers potential for rapid growth.
Palantir’s P/E ratio stands at 508.8, far above the sector median of 29.2. Despite its high valuation, PLTR benefits from a longer track record and established government contracts, making it less volatile than SOUN. Investors are effectively paying a premium for stability rather than explosive upside.
SOUN or PLTR: Which Stock Offers Higher Upside, According to Analysts?
Using TipRanks’ Stock Comparison Tool, we compared SOUN and PLTR to see which AI stock analysts favor. SOUN stock carries a Strong Buy rating from analysts with a projected upside of over 5% and a price target of $15. On the other hand, PLTR stock carries a Hold rating, with limited upside given its substantial one-year share price gains.
Conclusion
Palantir has already established itself as a major AI player with deep government and enterprise contracts, providing investors with greater stability and lower execution risk. In contrast, SOUN appeals to investors chasing high-risk, high-reward upside.