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Better Artificial Intelligence (AI) Stock: SoundHound AI vs. Palantir
The Motley Foolยท 2025-08-22 10:00
Core Viewpoint - Both SoundHound AI and Palantir Technologies are experiencing significant growth due to the increasing demand for their AI solutions, with SoundHound AI's stock rising over 24% and Palantir's stock showing similar gains in recent months [1][2]. Group 1: SoundHound AI - The conversational AI market is projected to grow fivefold from 2024 to 2032, potentially generating over $61 billion in annual revenue by the end of the forecast period [4]. - SoundHound AI is capitalizing on this growth by serving various industries, including restaurants, automotive, healthcare, and finance, and is introducing new products like voice AI agents and vision-enabled conversational AI [5][6]. - In Q2 2025, SoundHound AI reported revenue of just under $43 million, more than tripling its revenue from the previous quarter, and raised its full-year revenue guidance to $169 million, nearly double the previous year's revenue [7][8]. - The company's Polaris speech recognition model is claimed to be 35% more accurate and four times faster than competitors, which positions SoundHound favorably in the market [9]. - SoundHound's strong customer acquisition and cross-selling strategies, along with a significant backlog, suggest sustained momentum for the company [10]. Group 2: Palantir Technologies - Palantir has seen consistent growth as both commercial and government clients adopt its Artificial Intelligence Platform (AIP) to enhance their operations [11]. - Customers using AIP have reported substantial financial benefits, such as a $60 million profit increase for Sompo and daily savings of $40,000 for General Mills [13]. - Palantir's customer count increased by 43% in the last quarter, with a notable rise in the size of deals, including 157 deals worth $1 million or more, and a 55% year-over-year increase in deals worth $10 million or more [14]. - The company's revenue grew by 48% in Q2 to just over $1 billion, driven by an expanding customer base and increased spending [15]. - Palantir's leading position in the AI software market suggests potential for impressive long-term growth [17]. Group 3: Investment Considerations - Palantir is larger in terms of revenue compared to SoundHound, but SoundHound is growing at a faster rate due to its smaller revenue base and cheaper valuation [18][20]. - Investors seeking faster growth may prefer SoundHound AI, while those with a higher risk appetite might still consider Palantir due to its accelerating growth [20].