Comparison of SoundHound AI and Cerence AI: Which is the Better Buy?
The Rise of SoundHound AI: A Stock to Watch in the World of Artificial Intelligence
SoundHound AI (NASDAQ: SOUN) may not be a household name, but it has certainly caught the attention of investors as one of the best-performing stocks in the realm of artificial intelligence (AI). Since the beginning of 2023, SoundHound’s stock price has surged an impressive 429%, showcasing its potential in the market.
Specializing in voice-activated technology and catering to industries such as restaurants and automakers, SoundHound has positioned itself as a key player in the AI space. With a market cap of $4 billion, the company is still considered a small-cap stock with ample room for future growth.
In comparison to its competitor, Cerence (NASDAQ: CRNC), which has a market cap of around $400 million, SoundHound offers a broader range of services across various industries. While Cerence focuses primarily on AI-powered virtual assistants for the mobility and transportation market, SoundHound’s Houndify platform allows brands to build conversational voice assistants with advanced features like automatic speech recognition and natural language understanding.
Despite its recent revenue growth of 85% to $84.5 million in 2024, SoundHound is still working towards profitability, with an adjusted EBITDA loss of $61.9 million. On the other hand, Cerence, which reported a revenue increase of 12.5% to $331.5 million in fiscal 2024, is already profitable with an adjusted net income of $56.1 million.
Investors looking to capitalize on the AI market may find SoundHound’s rapid growth appealing, but the company’s path to profitability remains uncertain. In contrast, Cerence offers a more stable investment option with its profitability and established market presence, especially with recent partnerships like the one with Nvidia.
As the AI industry continues to evolve, both SoundHound and Cerence present unique opportunities for investors. While SoundHound showcases potential for high growth, Cerence’s stability and profitability make it a more attractive option for risk-averse investors. Ultimately, the choice between these two AI stocks comes down to individual risk tolerance and investment goals in the ever-changing landscape of artificial intelligence.
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