Voice AI has emerged as one of the most dynamic areas in artificial intelligence, bridging human-machine interaction across industries like automotive, retail and customer service. Two key players — SoundHound AI (SOUN Quick QuoteSOUN - Free Report) and Cerence Inc. (CRNC Quick QuoteCRNC - Free Report) — have emerged as leaders in distinct but converging segments. SoundHound focuses on enterprise-grade conversational AI for restaurants, financial services, healthcare and automotive, while Cerence remains deeply embedded in the automotive voice assistant market. Both companies are benefiting from the growing adoption of large language models (LLMs) in embedded and cloud systems.

Each reported strong quarterly results, both have raised guidance, and both are leaning heavily into “agentic AI” — systems capable of reasoning and acting autonomously. Yet, their paths diverge. SoundHound is expanding horizontally across industries, while Cerence is refining its dominance within automotive ecosystems and selective consumer applications.

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 has become a leading force in voice AI by merging advanced speech recognition with large language models to enable natural interactions. Acquisitions like SYNQ3, Amelia and Allset expanded its reach in restaurant ordering, customer service and voice commerce. The recent purchase of Interactions enhances its enterprise presence by integrating SoundHound’s Agentic AI with Interactions’ virtual assistant technology, extending its client base across major industries. With Interactions’ long-standing enterprise expertise, SoundHound can now deliver full-scale omnichannel AI solutions and accelerate automation across sectors such as finance, healthcare and retail, unlocking broader growth and cross-selling opportunities.

A key driver for SoundHound is its Agentic AI ecosystem, built around its Amelia 7 platform and Polaris, its proprietary multimodal speech and vision foundation model. The company now counts 15 large enterprise customers migrating to Amelia, positioning it at the forefront of agentic automation in customer service and enterprise workflows. The technology integrates deterministic precision with autonomous reasoning, enabling enterprise users to automate conversations without losing control — a core differentiator over traditional LLM-based chatbots.

The restaurant segment continues to be a breakout growth engine. SoundHound has expanded partnerships with major quick-service restaurant brands such as Red Lobster, Applebee’s, IHOP, MOD Pizza and Chipotle, often through cross-selling its enterprise AI solutions. The company also secured wins in healthcare (Primary Health Solutions, Allina Health) and financial services, where it now serves 7 of the top 10 global institutions, with automated conversation volumes doubling year over year.

In automotive, SoundHound’s Chat AI platform is now deployed across several North American and Chinese OEMs, including a major win with a top-five Chinese automaker and expanded business with Kia India. Its voice commerce pilots with carmakers and global merchants — enabling in-vehicle food ordering and parking payments — mark a new monetization frontier that directly complements Cerence’s legacy strengths.

Financially, SoundHound raised its full-year 2025 revenue outlook to $160-$178 million, underscoring accelerating adoption and strong visibility from enterprise contracts. However, investors must weigh its premium valuation (shares trade at a high forward price-to-sales multiple) against the continued operating losses. That said, management’s disciplined execution — including eliminating cloud dependencies from past acquisitions and consolidating tech onto Polaris — suggests improving cost efficiency.

In contrast to Cerence’s mature customer base, SoundHound’s diversification and faster top-line expansion offer more upside leverage to the broader AI adoption cycle. Yet, the lack of consistent profitability and dependence on new business ramp-ups remain near-term challenges.

The Case for Cerence Stock

The star of Cerence’s story is its xUI agentic platform, a next-generation hybrid LLM-based automotive assistant that integrates voice, emotion detection and contextual reasoning. Unlike SoundHound’s cross-industry strategy, Cerence is doubling down on its automotive DNA, leveraging decades of embedded software expertise to make xUI a bridge between OEM-controlled systems and cloud-based AI. The platform’s open and modular architecture appeals to automakers wary of ceding control to Big Tech ecosystems like Google or Apple.

During the third quarter of fiscal 2025, Cerence signed new deals with Volkswagen Group and Jaguar Land Rover (JLR) for next-generation in-car assistants and expanded programs with Hyundai, Great Wall Motors and Mercedes-Benz. It also launched partnerships with LG Electronics to bring its text-to-speech (TTS) technology to tens of millions of televisions — a significant non-automotive milestone that diversifies its revenue base.

Operationally, Cerence continues to demonstrate discipline and cash resilience. It ended the fiscal third quarter with $79.1 million in cash and securities, guiding for fiscal 2025 free cash flow between $38 million and $42 million and adjusted EBITDA of $42-$46 million, both of which improved from earlier expectations. Approximately 52% of global auto production now uses Cerence technology, highlighting its entrenched position in the sector. Its average price per vehicle (PPU) rose to $4.91, up from $4.47 a year earlier, showing expanding monetization per car.

However, Cerence faces a slower growth trajectory relative to SoundHound. Its total revenues for fiscal 2025 are projected at $244-$249 million, down from $331.5 million in fiscal 2024, reflecting the planned phase-out of fixed license deals. Moreover, while xUI’s agentic roadmap is promising, widespread deployment depends on OEM product cycles, which often span multiple years. This delays near-term revenue realization compared to SoundHound’s faster SaaS-style activations.

Still, Cerence’s profitability, recurring cash generation and measured diversification lend it defensive appeal, especially for investors prioritizing balance-sheet strength and predictability over hypergrowth.

Valuation: SOUN vs. CRNC

SoundHound, with a market capitalization of about $7.6 billion, trades at a 12-month forward price-to-sales (P/S) of 37.99X, reflecting the market’s bullish expectations for hypergrowth in the agentic AI space. The stock has gained an impressive 68.1% in the past three months, easily outpacing both the S&P 500 and its small-cap AI peers. This steep premium shows investors are pricing in sustained revenue acceleration from its automotive, enterprise and restaurant AI businesses. However, the lofty multiple also leaves little room for execution missteps or margin pressure.

SOUN & CRNC 3-Month Share Price Performance

Image Source: Zacks Investment Research

Cerence, by contrast, has a market capitalization of approximately $512.9 million and trades at a much more grounded 12-month forward P/S of 1.97X. Its shares have climbed 26.4% over the past three months, reflecting renewed confidence in management’s turnaround and profitability discipline. CRNC’s valuation implies a much lower growth expectation but greater appreciation for its positive free cash flow, recurring OEM contracts and margin stability.

Image Source: Zacks Investment Research

EPS Estimate Trend: SOUN vs. CRNC

On the earnings side, for SOUN stock, the Zacks Consensus Estimate for 2025 loss per share has remained unchanged at 13 cents over the past 60 days, and the estimated figure implies an improvement from the year-ago reported loss of $1.04 per share.

For CRNC stock, the Zacks Consensus Estimate for 2025 loss per share has remained unchanged at 12 cents over the past 60 days, and the estimated figure calls for a major decline from the year-ago reported earnings of $1.23 per share.

Conclusion

While both SoundHound and Cerence are advancing in agentic AI, SoundHound holds the current edge, thanks to its faster growth, broader industry reach and expanding enterprise momentum. Its acquisitions, cross-sector deployments, and rising adoption of the Amelia 7 and Polaris platforms highlight stronger scalability and revenue visibility.

Cerence remains profitable and entrenched in automotive, but its growth is constrained by long OEM cycles and slower diversification. In contrast, SoundHound’s rapid top-line expansion, multi-industry footprint and accelerating contract wins make SOUN stock the stronger growth play in voice AI at present.

Both stocks — each currently carrying a Zacks Rank #3 (Hold) — merit attention, but SoundHound currently offers the more compelling growth story. SOUN’s accelerating adoption of Amelia 7, deep enterprise integrations and expanding partnerships across verticals signal continued momentum. For investors with a higher risk appetite, SOUN looks better positioned to outperform in the coming year, while CRNC remains a steady hold for income and capital preservation. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.