SoundHound AI (SOUN Quick QuoteSOUN - Free Report) and Twilio (TWLO Quick QuoteTWLO - Free Report) are two companies riding the wave of voice technology and artificial intelligence, or AI, yet they occupy very different positions in the market. SoundHound AI is a focused voice-AI innovator known for its speech recognition and voice assistant solutions, while Twilio is a communications-platform giant that enables voice, messaging, and other channels for thousands of businesses. 

Both firms are leveraging the boom in generative AI to enhance voice interactions – from SoundHound’s voice assistants in cars and restaurants to Twilio’s AI-powered customer engagement tools. This common thread makes them worth comparing now, especially as voice-tech becomes a hotter investment theme in the age of AI.

SoundHound posted explosive growth but is still unprofitable, while Twilio showed improving profits but modest expansion, setting the stage for a classic growth-vs-value face-off. Let's dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.

The Case for SoundHound Stock

SoundHound AI is a pure-play voice AI specialist that has been gaining remarkable traction across multiple industries. The company’s first-quarter 2025 revenue jumped to $29.1 million, up 151% year over year, showcasing terrific growth momentum. This surge reflects robust demand for SoundHound’s voice-enabled solutions in areas like automotive, consumer devices, and restaurants. For example, SoundHound’s technology now powers voice ordering at nearly 13,000 restaurant locations, handling about 10 million voice interactions per quarter – a scale that cements its market leadership in voice-assisted ordering. The company’s innovations, such as its proprietary Polaris multimodal AI model, give it a technical edge (Polaris yields up to 4X faster response times and double the sentence accuracy of peers in noisy environments). These capabilities have helped SoundHound win business with major automakers and quick-service restaurant chains, contributing to a rapidly expanding customer base. Notably, no single client made up more than 10% of revenues in the first quarter, indicating diversification that reduces risk.

Opportunities ahead look vast for SoundHound. Management is targeting voice commerce and customer service as new frontiers – for instance, integrating voice assistants into cars to let drivers order products (like food) via voice, creating revenue-sharing opportunities with partners. The company’s recent acquisitions of restaurant voice-ordering specialist SYNQ3 and enterprise AI firm Amelia (for customer-service bots) position it to cross-sell and enter new markets. In fact, SoundHound expects these moves to help more than triple revenues from $46 million in 2023 to $157-$177 million in 2025. Its bookings pipeline is strong (growing sequentially in the last quarter and at a high double-digit rate versus prior year), and AI trends are clearly tailwinds. With generative AI driving a “voice-first” shift, SoundHound’s niche focus gives it a first-mover advantage among companies seeking bespoke voice AI solutions. The company is also on a path toward profitability: after aggressive cost cuts and efficiency gains, SoundHound anticipates reaching adjusted EBITDA break-even by the end of 2025.

SoundHound remains unprofitable on a net basis (it had a $22.3 million non-GAAP net loss in the first quarter) and is spending heavily to integrate acquisitions and scale up. Its gross margin slipped to 36.5% on a GAAP basis and 51% on a non-GAAP basis due to acquired lower-margin contracts, though management is phasing out less profitable deals over time. Competition is another factor – tech giants like Amazon AMZN and Alphabet GOOGL dominate consumer voice assistants, and even Twilio is entering AI voice agents – so SoundHound must continue innovating to defend its turf. Each of these rivals – Amazon, Google, and Twilio – brings significant scale, capital, and ecosystem advantages, raising the bar for innovation. Maintaining a lead in areas like multilingual accuracy and customizability will be crucial for SoundHound to differentiate its offerings from Amazon’s and Google’s platforms, while staying ahead of Twilio’s growing ambitions in voice AI.

The Case for Twilio Stock

Twilio, by contrast, is a much larger and more established player in the broader communications software arena – but it too is leaning into voice AI to reaccelerate growth. Known for its cloud communications platform (CPaaS), Twilio enables businesses to connect with their customers via voice calls, SMS, email, and more through its APIs. A few years ago, Twilio was a high-flyer with breakneck revenue increases (74% growth in 2019, 61% in 2021, etc.). However, growth decelerated sharply post-pandemic as core demand normalized and the company digested several acquisitions. In first-quarter 2025, Twilio’s revenues were $1.17 billion, up 12% year over year, marking a return to double-digit growth after a string of slower quarters. This is a far cry from SoundHound’s triple-digit gains, but it’s an encouraging sign that Twilio’s business has stabilized and is modestly re-accelerating. In fact, Twilio raised its full-year 2025 organic revenue growth outlook to a range of 7.5% to 8.5% (up from 7%—8% of earlier expectation), suggesting cautious optimism. Importantly, Twilio is now solidly profitable on an adjusted basis – it delivered $1.14 in non-GAAP EPS in the first quarter (beating estimates) and an 18.2% operating margin (up 300 basis points from a year ago), plus $175 million in free cash flow. After years of losses, the company’s strategic shift toward “discipline and focus” is yielding results, with operating costs down and margins up.

Twilio’s key strength is its massive scale and customer base. It serves over 300,000 active customer accounts, giving it a huge cross-selling opportunity for new products. Now the company is pushing into AI features that can be layered onto its platform. For example, Twilio launched Conversation Relay, a toolkit for developers to build AI voice agents (virtual assistants for call centers). To enhance this, Twilio partnered with ElevenLabs to offer over 1,000 ultra-realistic AI-generated voices in 40 languages, enabling brands to create natural-sounding automated agents. A healthcare client (Cedar) used Twilio’s tech to build an AI voice agent that is projected to automate 30% of its inbound calls by the end of 2025. Twilio also introduced a new Voice Intelligence feature powered by generative AI to analyze call transcripts and automate insights (for tasks like call scoring or compliance monitoring). These moves signal that Twilio is evolving beyond basic communications into higher-margin AI software, potentially even competing with the likes of SoundHound in enterprise voice assistants. Early signs are positive – Twilio reports “high praise” for its innovation and noted that add-on products like Voice Intelligence and Verify are “growing much faster than the company average”. Additionally, Twilio’s entrenched position in messaging and connectivity (it won a new eight-figure deal for SMS 2FA and signed up big clients like a Premier League football club for its data platform) gives it a foundation of recurring revenue that smaller rivals lack.

That said, Twilio faces its own challenges. The company’s revenue growth, while improved, is still only in the high-single to low-double digits – a far cry from the growth of nimble upstarts like SoundHound. Twilio’s core communications API business (especially text messaging) is maturing, and parts of its portfolio have stagnated (for instance, its Segment customer-data unit grew just 1% in the first quarter). The macroeconomic climate is a wildcard too, as enterprise software spending remains cautious. Twilio’s pivot to AI and higher-margin software is promising, but it will take time to move the needle on a more than $4.5 billion revenue base. Competition is intensifying in CPaaS and customer engagement software, and Twilio must prove it can reignite growth without sacrificing its newfound profitability.

SOUN & TWLO Stock Performances

SoundHound shares have surged 57.4% in the past three months, surpassing the broader Zacks Computer and Technology sector’s 32.7% gain and leaving broader S&P 500 benchmark far behind. On the other hand, TWLO stock has also shown a notable gain of 56.2% during the same period.

Image Source: Zacks Investment Research

Valuation of SOUN & TWLO Stocks

While the growth narrative is strong, valuation is a key concern for SoundHound. SOUN stock trades at a forward 12-month Price-to-Sales (P/S) ratio of 27.17X, significantly higher than TWLO stock’s 4X. Historically, SOUN’s three-year P/S range spans from 2.92X to 94.40X, highlighting the stock’s volatility and sensitivity to investor sentiment. In other words, a lot of future success is already priced in. Still, for investors with a higher risk appetite, SoundHound’s combination of hyper-growth and AI-driven market potential makes a compelling case. 

On the valuation front, Twilio looks much cheaper than SoundHound. If the company’s AI initiatives succeed in boosting growth, there could be significant upside from such a compressed valuation.

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Estimate Revision Trend for SoundHound and Twilio

The Zacks Consensus Estimate for SoundHound’s 2025 EPS has remained unchanged over the past 60 days at a loss of 16 cents per share. While the top-line outlook remains robust, investors should closely watch for margin improvements and cost discipline across R&D and S&M spend.

For SOUN Stock

Image Source: Zacks Investment Research

For Twilio, earnings estimates for 2025 and 2026 have trended downward in the past 60 days to $4.49 per share and $5.07, respectively. The estimated figures for 2025 and 2026 indicate 22.3% and 12.9% year-over-year growth, respectively.

FOR TWLO Stock

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Conclusion

Both SoundHound and Twilio are making strategic bets on voice technology and generative AI, but they represent different investment profiles. Twilio is a large-cap company in the midst of a transition—shifting from a maturing CPaaS business into higher-margin AI-driven engagement tools. Its profitability improvements and strong cash flow are commendable, but the company's slower revenue growth and recent downward earnings revisions limit near-term enthusiasm. With a Zacks Rank #5 (Strong Sell), Twilio stock reflects this cautious outlook. 

SoundHound, despite being unprofitable and carrying a premium valuation, is delivering explosive revenue growth and capturing market share in the nascent voice-AI space. Its strong momentum, diversified customer base, recent acquisitions, and progress toward breakeven EBITDA suggest a clear runway for expansion. The Zacks Rank #3 (Hold) reflects both promise and risk—but compared to Twilio, SoundHound currently has stronger tailwinds and a more compelling growth narrative for aggressive investors. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Given the respective rankings, growth trajectories, and risk-reward profiles, SoundHound appears to have the stronger upside potential at this stage of the AI voice tech race.