SoundHound vs. C3.ai: Which AI Stock Is the Better Buy Now?

Core Insights - Artificial intelligence is a compelling long-term investment theme, with SoundHound AI and C3.ai representing distinct approaches within the AI sector [1][2] Company Performance - SoundHound has positioned itself as a leader in voice-enabled AI across various sectors, while C3.ai focuses on enterprise AI applications [2] - Over the past six months, SoundHound's stock has decreased by 39.4%, and C3.ai's stock has fallen by 37.5%, both underperforming the Zacks Computers – IT Services industry, which declined by 18.6% [4] - SoundHound reported a 68% year-over-year revenue growth in Q3, with revenues reaching $42 million, while C3.ai's total revenues for the fiscal second quarter were $75.1 million, with subscription revenue making up 93% of total revenue [10][14] Valuation and Financial Metrics - SoundHound trades at a forward price-to-sales ratio of 13.26X, in line with the industry average, while C3.ai trades at a significantly lower 4.59X, indicating a steep discount [8] - SoundHound is narrowing its projected losses, with a consensus estimate for a loss per share of 6 cents in 2026, while C3.ai faces deeper expected losses with a projected loss of $1.21 per share [13][18] Growth and Strategic Initiatives - SoundHound is expanding its voice commerce capabilities and has partnerships with companies like Parkopedia and OpenTable to enhance monetization [12] - C3.ai has shown strong federal bookings growth, with a 49% sequential increase in bookings and an 89% year-over-year growth in federal bookings, indicating strong momentum in government sectors [15] Investment Outlook - SoundHound's growth trajectory and expanding monetization ecosystem suggest better upside potential compared to C3.ai, which is facing revenue contraction and deeper losses [20][21]