AI Stock Showdown: SoundHound AI vs C3.ai - Which Offers Higher Upside for 2025?

SOUN (SoundHound AI) and C3.ai are AI stocks with unique offerings and growth potential. SOUN's Q2 revenue soared 217% YoY to $42.7 million, while C3.ai's Q1 FY26 revenue results disappointed with a projected $70.2-$70.4 million, down from $87.2 million last year. Analysts favor SOUN, with a higher upside potential, but both stocks are considered high-risk, high-reward plays.

SOUN (SoundHound AI) and C3.ai are two prominent AI stocks with unique offerings and growth potential. SOUN's Q2 revenue soared 217% year-over-year (YoY) to $42.7 million, while C3.ai's Q1 FY26 revenue results disappointed with a projected $70.2-$70.4 million, down from $87.2 million last year. Analysts favor SOUN, with a higher upside potential, but both stocks are considered high-risk, high-reward plays.

SoundHound AI (SOUN)
SoundHound AI, listed on the NASDAQ under the ticker SOUN, is a pure-play AI stock that specializes in voice recognition technology. The company combines AI with audio recognition, offering a platform that outperforms human counterparts in various applications, such as restaurants, automotive, healthcare, and financial services. In Q2, SOUN reported a blowout quarter with a 217% YoY revenue increase, raising its full-year outlook from $167 million to $169 million [1].

However, SOUN's profitability remains a concern. The company reported an operating loss of $78 million in the second quarter, nearly double its $43 million in revenue. Analysts project 29% growth for 2026, but the stock is currently trading at 46 times sales, far from the typical 10-20 times valuation for software stocks. Investors should be cautious about SOUN's high valuation and the likelihood of its revenue expansion pace lasting indefinitely.

C3.ai
C3.ai, listed on the NYSE under the ticker AI, is an enterprise AI company that transforms industries using its AI platform. In Q2 2025, C3.ai reported a 29% YoY revenue increase to $94.3 million, driven by robust subscription growth. However, the company reported a GAAP net loss per share of $(0.52) and a non-GAAP loss of $(0.06), with full-year 2025 GAAP losses narrowing slightly to $(2.24) per share from $(2.34) in 2024 [2].

C3.ai's leadership turmoil and operational reorganization caused a 20% Q1 2026 revenue drop, with the CEO search still unresolved. The company's strategic partnerships with Microsoft and AWS, along with a $450 million Air Force contract, provide stability, but monetization of AI innovations remains unproven. C3.ai's AI enterprise model hinges on recurring revenue, strategic partnerships, and innovation, but the path to profitability remains unclear.

Investment Implications
Both SOUN and C3.ai are high-risk, high-reward plays. SOUN's explosive growth and high valuation make it a challenging stock to analyze, while C3.ai's leadership uncertainty and unproven monetization strategies pose significant risks. Investors should consider their risk tolerance and time horizon before allocating capital to these stocks. For SOUN, the company's success in capturing market share and the potential for doubling revenue through next year could lead to high returns, but the high stock price today is prohibitive of future robust returns. For C3.ai, the company's AI vision is compelling, and its federal contracts provide a defensive edge, but the leadership vacuum and recent revenue dip pose significant risks.

Conclusion
SOUN and C3.ai are AI stocks with unique offerings and growth potential. While SOUN's Q2 revenue soared, its profitability and high valuation make it a challenging stock to analyze. C3.ai's Q1 FY26 revenue results disappointed, but the company's AI-driven strategy and strategic partnerships provide a compelling long-term vision. Both stocks are high-risk, high-reward plays, and investors should approach them with caution.

References
[1] https://finance.yahoo.com/news/where-soundhound-ai-5-years-103000672.html
[2] https://www.ainvest.com/news/assessing-c3-ai-ai-enterprise-model-leadership-financial-challenges-2508/