SOUN vs. PLTR: Which AI Stock Should You Buy Post Q1 Earnings?

AI companies SoundHound AI (SOUN) and Palantir Technologies (PLTR) recently reported their Q1 2026 earnings. Despite delivering strong results and beating expectations, both stocks moved lower after earnings, reflecting growing investor concerns about valuation. Using TipRanks’ Stock Comparison tool, we compared SOUN and PLTR to see which AI stock may offer a better opportunity after earnings. Currently, SOUN carries a Strong Buy rating with over 45% upside potential. In comparison, PLTR has a Moderate Buy rating, with a more modest upside of around 36%.

Both companies are part of the AI boom, but they operate differently. For context, Palantir focuses on data platforms and government clients, while SoundHound is focused on voice AI and fast-growing consumer and enterprise applications. Year-to-date, PLTR stock is down almost 23%, while SOUN has fallen 3%.

Let’s dig deeper.

Palantir’s Q1 Was Strong, but Valuation Remains a Concern

For Q1 2026, PLTR reported earnings per share of $0.33, ahead of estimates for $0.28, while revenue jumped 85% year-over-year to $1.63 billion. The company’s U.S. business remained the main growth driver, with total U.S. revenue climbing 104% to $1.28 billion. Commercial revenue surged 133%, while government revenue increased 84%.

Despite the strong performance, the stock came under pressure due to valuation concerns. Palantir currently trades at a forward P/E ratio near 100x, making it one of the most expensive software stocks in the market.

Following the earnings, DA Davidson’s analyst Gil Luria lowered his price target on PLTR to $165 from $180 while maintaining a Hold rating. Although he praised the company’s rapid growth and strong Q1 execution, he noted that investor expectations had already become extremely elevated ahead of earnings. According to Luria, Palantir now faces the challenge of needing to consistently exceed increasingly aggressive expectations to keep the rally going.

SoundHound’s Q1 Beat Leaves the Market Unimpressed

SOUN reported Q1 revenue of $44.2 million, marking a 52% year-over-year increase and beating Wall Street estimates. The company also posted a loss of $0.06 per share, which was better than the expected loss of $0.10. Despite the strong results, the stock declined about 8% in pre-market trading as investors focused more on concerns around margins, valuation, and the timeline to profitability.

For the full year, SoundHound reaffirmed its 2026 revenue guidance of $225 million to $260 million, implying growth of roughly 33% to 54%. However, the lack of an upward revision to its outlook disappointed investors who were expecting stronger forward guidance after the earnings beat.

Much like other high-growth AI stocks such as PLTR, expectations had already been pushed very high after a strong rally over the past year. As a result, even solid earnings were not enough to satisfy investors looking for faster acceleration in growth or clearer progress toward sustained profitability.

Conclusion

SOUN and PLTR both delivered strong Q1 2026 results, but they sit in very different positions for investors.

Palantir looks more stable and institutionally supported, with much stronger revenue scale, consistent government and enterprise contracts, and a clearer path toward profitability. However, its valuation is extremely high, meaning the stock may not offer much short-term upside unless it continues to deliver exceptional growth.

SoundHound, on the other hand, is much smaller and growing faster in percentage terms, but it is still unprofitable and more volatile. Even after beating earnings, investors remain cautious about its long-term margins and ability to scale profitably.