SoundHound AI vs. GitLab: Which Stock Is the Better 2026 Rebound Candidate?

The intersection of artificial intelligence (AI) and software-as-a-service (SaaS) has created a volatile yet fertile ground for innovation in 2026. As investors seek to capitalize on the next wave of disruption, two mid-cap stocks-SoundHound AI (SOUN) and GitLab (GTLB)-stand out as contenders for a rebound. Both companies are leveraging AI to redefine their industries, but their divergent strategies, financial health, and valuation metrics paint a nuanced picture of their 2026 potential.

SoundHound AI: Aggressive Growth Amid Execution Risks

SoundHound AI has positioned itself as a pioneer in agentic AI, with its Amelia 7 platform targeting enterprise use cases in voice commerce, automotive, and customer service. The company's revenue surged 67.6% year-over-year in Q3 2025 to $42.05 million, driven by broad adoption across industries. For the first three quarters of 2025, revenue totaled $114 million, prompting management to raise full-year guidance to $165–$180 million. However, this growth has come at a cost: a $109.3 million net loss in Q3, partly due to a $66 million non-cash accounting charge from acquisitions.

Despite these challenges, SoundHound's balance sheet remains robust, with $269 million in cash and no debt. Analysts remain cautiously optimistic, assigning a "Moderate Buy" rating, with six out of nine analysts recommending a "Strong Buy" and a median target price of $17.42 (54.5% upside from current levels). The company's vision to become a cross-industry agentic AI platform is ambitious, but execution risks loom large. For instance, the automotive segment-where SoundHound has historically thrived-faces headwinds from global tariffs and industry softness.

GitLab: Stability and Resilience in a Competitive Landscape

GitLab, a DevSecOps platform integrating AI into software development, has demonstrated more consistent growth. In Q4 2025, the company reported $211.4 million in revenue, a 29% year-over-year increase, with non-GAAP operating income of $37.4 million and a 18% operating margin. For the full fiscal year 2025, revenue reached $759.2 million, reflecting a 31% annual growth rate. GitLab's gross margins of 89% far outpace SoundHound's 49%, underscoring its operational efficiency.

Valuation metrics also favor GitLab. The stock trades at a forward price-to-sales ratio of 9.9, significantly lower than SoundHound's 23.5. Moreover, GitLab is currently priced 39.8% below its estimated fair value, with revenue growth projected at 15.24% annually. The company's recent AI offerings-such as GitLab Duo AI and GitLab Dedicated-have strengthened its position in secure, enterprise-grade environments. While its growth trajectory is less explosive than SoundHound's, GitLab's positive operating cash flow of $63.2 million in Q4 2025 makes it a more conservative bet.

AI Disruption and Valuation Resilience: A Comparative Lens

The key differentiator between these two stocks lies in their approach to AI disruption. SoundHound's focus on agentic AI-a nascent but high-potential segment-positions it to capture a larger market opportunity in voice commerce and cross-industry automation. However, this ambition comes with execution risks, as the company must navigate intense competition and prove its ability to scale beyond niche use cases. GitLab, by contrast, is embedding AI into its core DevSecOps workflows, enhancing productivity for developers while maintaining its SaaS fundamentals. This strategy aligns with the broader trend of AI-augmented software development, a market expected to grow steadily over the next decade.

From a valuation perspective, GitLab's metrics suggest greater resilience. Its high gross margins, positive cash flow, and lower price-to-sales ratio indicate a more sustainable path to profitability. SoundHound, while growing rapidly, remains unprofitable and relies on aggressive capital allocation to fund its expansion. The latter's stock has fallen 43% year-to-date, reflecting investor skepticism about its path to EBITDA profitability by Q4 2025. GitLab's 36% year-to-date decline, meanwhile, appears more aligned with broader market corrections in the SaaS sector rather than company-specific risks.

Conclusion: The Better 2026 Rebound Candidate

For investors seeking a safer bet in 2026, GitLab's established SaaS model, superior gross margins, and disciplined capital allocation make it the more resilient choice. Its integration of AI into software development workflows is a natural extension of its core offering, reducing execution risk while capitalizing on long-term industry trends. SoundHound AI, on the other hand, offers higher upside potential for those willing to tolerate volatility. Its aggressive expansion into agentic AI could pay off if the market adopts its vision, but the path to profitability remains uncertain.

In a market where AI disruption is both an opportunity and a threat, GitLab's balance of growth and stability may prove more attractive as 2026 unfolds. However, SoundHound's bold strategy could still deliver outsized returns for risk-tolerant investors betting on the next frontier of AI.