SoundHound AI Stock vs. Palo Alto Networks Stock: Wall Street Says Only One Will Head Higher in 2025

As we step into 2025, investors are faced with a crucial decision: which tech stock to bet on, SoundHound AI (SOUN) or Palo Alto Networks (PANW)? Both companies have made significant strides in their respective fields, but only one is poised to outperform the other in the coming year. Let's delve into the key factors that set these two stocks apart and explore Wall Street's predictions for their future performance.



SoundHound AI: The Voice Recognition Pioneer

SoundHound AI has been making waves in the voice recognition and AI-powered chatbot market, with its stock soaring 630% in 2024. The company's innovative technology has found applications in various industries, from restaurant order automation to automobile chatbots. SoundHound AI's revenue growth of 630% YoY in 2024 and expected revenue of $2.5 billion in 2025 indicate a strong growth trajectory. However, the company's high valuation (P/S ratio of 29) and lack of profitability pose potential risks to its long-term growth.

Palo Alto Networks: The Cybersecurity Veteran

Palo Alto Networks, on the other hand, is a well-established player in the cybersecurity industry, with a market capitalization of $36.6 billion. The company's revenue growth of 89% YoY in Q3 2024 and expected revenue of $155-$175 million in 2025 demonstrate its strong financial performance. Palo Alto Networks' lower valuation (P/S ratio of 5.5) and expected profitability by the end of 2025 make it a more attractive long-term investment.



Wall Street's Predictions for 2025

Analysts have weighed in on the potential of both stocks in 2025. For SoundHound AI, the average price target is $28.41, representing a 12.7% increase from its current price. While this growth is impressive, it pales in comparison to Palo Alto Networks' expected gains. Analysts have set an average price target of $327.67 for Palo Alto Networks, indicating a 105% increase from its current price.



The Verdict: Palo Alto Networks Will Head Higher in 2025

Based on the provided data and Wall Street's predictions, Palo Alto Networks appears to be the better investment choice for 2025. The company's strong financial performance, lower valuation, and expected profitability make it a more attractive long-term investment. While SoundHound AI's impressive growth and innovative technology are compelling, its high valuation and lack of profitability pose potential risks to its long-term growth.

Investors should closely monitor both companies' financial performance and valuations, as well as any developments in their respective industries. As the tech landscape continues to evolve, so too will the investment opportunities presented by these two stocks.