SoundHound AI Vs. BigBear.ai: Which Stock Is the Better Buy?

Shares of SoundHound AI, Inc. SOUN and BigBear.ai Holdings, Inc. BBAI have soared 182.2% and 423.7% over the past year due to the rapid growth of artificial intelligence (AI). Let’s explore which of these AI stocks investors should prioritize for future returns.

Reasons to Be Bullish on SoundHound AI Stock 

SoundHound AI reported first-quarter revenues of $29.1 million, a 151% increase year over year. SoundHound AI anticipates 2025 revenues of $157 million to $177 million, up from last year’s $84.7 million. SoundHound AI’s 2024 booking backlog of $1.2 billion suggests strong long-term revenue growth, alongside a total addressable market (TAM) of $140 billion, indicating potential for further expansion.

Demand for SoundHound AI’s voice solutions is growing due to their efficiency and automation benefits. The conversational AI market is projected to grow from $17.05 billion in 2025 to $49.80 billion by 2031, per marketsandmarkets, offering opportunities for increased customer acquisition.

Rising customer demand for quick service and labor shortages are driving restaurants to adopt voice automation, benefiting SoundHound AI, which now counts Casey’s General Stores, Inc. CASY and Chipotle Mexican Grill, Inc. CMG among its clients. Finally, if trade tensions ease, SoundHound AI’s overseas costs, particularly in China, will decrease, benefiting its bottom line.

Reasons to Be Bullish on BigBear.ai Stock 

BigBear.ai’s AI shipbuilding software supports U.S. Navy submarine construction, and its facial recognition technology is used in airport security. The company reported $34.8 million in first-quarter revenues, a 5% year-over-year increase. For the full year, BigBear.ai expects revenues to increase to $160-$180 million.

In 2025, BigBear.ai experienced leadership changes, with Kevin McAleenan becoming CEO in January and the CFO departing in June; McAleenan’s prior role as U.S. Homeland Security Secretary may aid in securing government contracts.

Which AI Stock, SOUN or BBAI, Deserves Your Bet? 

Despite revenue growth, SoundHound AI and BigBear.ai are unprofitable, with losses of $188 million and $62 million in the past 12 months and the first quarter, respectively. BigBear.ai’s adjusted EBITDA worsened from -$1.6 million to -$7 million due to increased R&D spending.

However, SoundHound AI’s first-quarter revenue growth significantly outpaces BigBear.ai, with a robust balance sheet showing negligible debt, total assets of $587.5 million, and $245.8 million in cash exceeding total liabilities of $190.5 million. On the other hand, BigBear.ai had total liabilities of $198.5 million in the first quarter, including $100.6 million in long-term debt. 

BigBear.ai’s weak sales growth and balance sheet hinder profitability, while SoundHound AI’s strong sales and healthy balance sheet suggest profitability by the end of 2025. Moreover, BigBear.ai relies heavily on federal contracts, making it vulnerable to cuts, while SoundHound AI is less exposed to such risks, making it a better AI investment choice.

Having said that, BigBear.ai’s backlog rose 30% year over year to $385 million in the first quarter, fueled by new government contracts, indicating potential growth and investment opportunity. Currently, each of the stocks has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

This article originally published on Zacks Investment Research (zacks.com).

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