AI Stocks in the Spotlight: AT&T vs. SoundHound AI—Which Offers Better Growth?

As artificial intelligence (AI) continues to redefine industries, investors are seeking companies poised to capitalize on this transformative technology. In this analysis, we pit two seemingly different players—AT&T (T) and SoundHound AI (SOUN)—against each other to determine which offers a stronger investment thesis in the AI-driven economy.

SoundHound AI: The Aggressive AI Pure-Play

SoundHound AI, a leader in voice-enabled AI solutions, has been on a tear. In Q4 2024, revenue surged 101% year-over-year to $34.5 million, with full-year 2024 revenue up 85% to $84.7 million. The company’s Agentic AI platform, designed for voice commerce, healthcare, and automotive, has driven partnerships with major players like Lucid Motors, Duke Health, and Rekor. By Q1 2025, SoundHound raised its revenue guidance to $157–$177 million, reflecting a 85–108% increase over 2024.

Strengths:
- Voice-first innovation: Its Agentic AI powers voice assistants for in-car food ordering and healthcare systems, addressing high-growth markets.
- Cash-rich balance sheet: With $198 million in liquidity and no debt, the company can fuel R&D without dilution.
- Sector diversification: Deployments in automotive, healthcare, retail, and government suggest broad scalability.

Weaknesses:
- Operating losses: Adjusted EBITDA widened to $(16.8 million) in Q4 2024, signaling ongoing investment in growth.
- High volatility: A $221 million non-cash mark-to-market adjustment in late 2024 highlights equity valuation risks.

AT&T: The Telecom Giant Betting on AI Integration

AT&T’s Q1 2025 projections reveal a mixed picture. While revenue is expected to grow 1.4% to $30.44 billion, EPS is projected to drop 5.5% to $0.52. The company is prioritizing AI integration across its ecosystem:

1. Consumer devices: Partnerships with Samsung and Google include AI features like Audio Eraser (Galaxy S25) and Gemini Live (Pixel 9a).
2. Enterprise AI:
3. Fraud detection: Generative AI (GenAI) reduces fraud by 80% using real-time analysis of unstructured data.
4. Fixed wireless for businesses: AT&T Internet Air targets the “middle mile” infrastructure demands of AI-driven workloads.

Strengths:
- Scale and stability: A debt-free $198 billion market cap (vs. SoundHound’s ~$200 million) offers financial resilience.
- AI-enabled infrastructure: 5G and fiber networks form the backbone for AI applications in industries like healthcare and automotive.
- Consistent dividends: AT&T’s yield of 6.5% appeals to income-focused investors.

Weaknesses:
- Legacy business drag: Business Wireline revenue fell 9.1% in Q1 2025, while non-fiber broadband connections dropped 14.3%.
- Earnings uncertainty: A negative Zacks Earnings ESP (-6.28%) suggests analysts expect a potential miss.

Head-to-Head Comparison: Growth vs. Stability

Metric	SoundHound AI	AT&T
Revenue Growth (2024)	85%	1.4% (2025E)
Operating Margin (2024)	-73% (Adjusted EBITDA)	17% (Communications segment)
Key AI Focus	Pure-play voice-commerce/healthcare	Integrated into devices/networks
Stock Volatility	High (startup phase)	Moderate (blue-chip stability)
Debt	$0	$32.4 billion (but manageable)

Conclusion: Which AI Stock Wins?

SoundHound AI is the better growth bet for investors with a higher risk tolerance. Its 101% YoY revenue growth, cash-rich balance sheet, and sector-diverse AI applications position it to capitalize on voice commerce and healthcare tech. However, its operating losses and volatile valuation make it riskier.

AT&T, meanwhile, offers stability and dividends, with AI integration enhancing its core telecom and enterprise services. Its Q1 2025 revenue growth, though modest, is underpinned by 3.9% mobility revenue growth and 12% fiber broadband expansion. Investors seeking defensive exposure to AI might prefer AT&T’s dividend yield and diversified revenue streams.

Final Verdict:
- Buy SoundHound AI if you prioritize aggressive AI growth and can tolerate volatility.
- Hold AT&T for income and steady AI adoption within a stable telecom giant.

Both companies are betting on AI’s future, but their paths diverge sharply—SoundHound as the disruptor, AT&T as the enabler. Investors must choose between growth or stability based on their risk appetite.