Palantir or SoundHound AI: Which AI stock is better?

Stocks linked to artificial intelligence have benefited from investors’ enthusiasm for this technology. In this sector, two companies stand out: Palantir Technologies (PLTR 1.43%) et SoundHound AI (SOUN -0.23%).

Palantir’s shares are up more than 300% in the past 12 months, while SoundHound’s shares have exploded 600%.

Between these two stocks, is one proving to be a clearly superior investment choice to take advantage of the expanding AI market?

The strengths of Palantir

Palantir is experiencing strong growth thanks to its Artificial Intelligence Platform (AIP), launching in 2023. As CEO Alex Karp said in the third quarter earnings press release: “We have clearly exceeded our expectations this period , driven by a relentless demand for AI that will not weaken.”

What makes Palantir’s AIP so powerful is that it goes beyond dialogue-based AI tools, popularized by ChatGPT, that simply answer human questions. The AIP platform in fact integrates an “AI agent”, capable of acting on behalf of its users.

For example, AIP improved a large insurance company’s underwriting process, reducing a two-week turnaround time to just three hours. As CTO Shyam Sankar pointed out: “This only reinforces our belief that the value lies in the application and workflow, areas where we excel.”

As a result, customer interest in AIP helped Palantir report 30% year-over-year revenue growth, reaching $725.5 million in the third quarter. This also contributed to a doubling of net income from $73.4 million in 2023 to $149.3 million in 2024. Additionally, free cash flow increased by 60% to $434.5 million .

At the end of the third quarter, the company had $768.7 million in cash and equivalents, as well as $3.8 billion in marketable securities, far exceeding its total liabilities of $1.2 billion. With total assets of $5.8 billion, Palantir is in an excellent financial position, with a large cash reserve to invest in expansion.

An overview of SoundHound AI

SoundHound offers a voice AI software platform capable of understanding human speech in 25 languages. Its stock price has been propelled by several factors over the past year.

First, in the third quarter, its sales soared 89% from the previous year, reaching a record $25.1 million. Second, investment bank HC Wainwright raised its price target on SoundHound stock from $8 to $26 in December. Finally, it is a popular stock among online investors.

However, these are favorable factors in the short term. The question remains whether SoundHound AI is a good long-term investment. Although the stock price has fallen 6% over the past month, the company has made significant acquisitions, including the purchase of Amelia AI for $80 million, strategically positioning it for success in long term.

These acquisitions allowed SoundHound to reduce its dependence on its largest customer, accounting for 72% of its sales in the third quarter of 2023, compared to just 12% in the third quarter of 2024. Additionally, in 2023, more than 90% of his income came from the automobile sector. Today, its sales are diversified across several sectors, including restaurants and financial services.

SoundHound’s balance sheet is also strong. Its third-quarter assets totaled $499.7 million, with $135.6 million in cash and equivalents, compared to total liabilities of $203.7 million.

SoundHound management estimated its 2024 revenues would be between $82 million and $85 million, up from $45.9 million in 2023. For this year, it anticipates sales will continue to increase, reaching between 155 and 175 million dollars.

Choosing between Palantir and SoundHound AI

Both Palantir and SoundHound AI present reasons to invest. However, when it comes to choosing long-term AI investment, Palantir is a clear winner for several reasons.

Palantir is profitable, while SoundHound posted a net loss of $21.8 million in the third quarter. Additionally, when comparing their price-to-sales (P/S) ratios, it appears that Palantir stock offers better value. The P/S ratio indicates how much investors are willing to pay for a dollar of a company’s revenue.

Data from YCharts.

Although SoundHound’s P/S multiple declined in 2025 after peaking near the end of 2024, it remains higher than Palantir’s at present. Add to this that Palantir has been included in the index S&P 500 last year.

In short, thanks to its powerful AI platform, its solid financial results and a more favorable stock market valuation, Palantir appears to be the preferred AI stock for a long-term investment.