The Motley Fool·2025-12-04 22:24Core Viewpoint - SoundHound AI's high valuation may negatively impact its stock performance, allowing Ambarella to potentially surpass SoundHound's market capitalization in the coming year [1][3]. SoundHound AI - SoundHound AI has experienced significant revenue growth due to its popular voice AI solutions across various industries, but its stock has declined by 42% this year, trading at 32 times sales [2]. - The company's expected revenue for 2026 is projected to be $233 million, which may lead to a decrease in market cap to approximately $3.7 billion if it trades at 16 times sales [14]. Ambarella - Ambarella has shifted focus to AI-capable computer vision chips, which has resulted in a substantial increase in revenue from edge AI processors, expected to account for 80% of its revenue in the current fiscal year [6][7]. - The company is on track to achieve $390 million in revenue for fiscal year 2026, reflecting a 37% increase from the previous year, with earnings expected to rise to $0.59 per share from a loss of $0.16 per share [7][9]. - Ambarella's average selling prices have increased by 20% year-over-year, contributing to margin improvements and overall profitability [8]. - The edge AI hardware market is projected to grow significantly, with estimates suggesting it could reach $59 billion by 2030, indicating strong long-term growth potential for Ambarella [10][12]. - If Ambarella achieves a 20% revenue increase in the next fiscal year, its revenue could rise to $468 million, and its market cap could increase to $3.9 billion, trading at a lower multiple compared to the sector average [13].