Back to top

Image: Bigstock

SoundHound Vs. NVIDIA: Which AI Stock Should You Buy Before 2026?

Read MoreHide Full Article

Key Takeaways

  • SoundHound is seeing rising adoption of its platforms across finance, restaurants, autos and healthcare.
  • SOUN posted Q3 revenues of $42M, with full-year sales projected between $165M and $180M.
  • NVIDIA delivered strong Q3 results with $57B in revenues and expects $65B in fiscal Q4.

The artificial intelligence (AI) boom has helped NVIDIA Corporation’s (NVDA - Free Report) shares gain traction this year, while a smaller player, SoundHound AI, Inc. (SOUN - Free Report) , despite a strong 2024 performance, saw its stock stumble. What caused the decline, can it bounce back, and how does it compare with NVIDIA from an investment perspective ahead of the new year? Let’s take a closer look –  

SoundHound Gets a Boost From Growing AI Platform Adoption  

SoundHound’s products have gained popularity among clients in industries such as finance and restaurants. Its Houndify platform, which enables companies to build customized AI voice recognition solutions, is now being adopted by card issuers, such as Mastercard Incorporated (MA - Free Report) and restaurant chains like Chipotle Mexican Grill, Inc. (CMG - Free Report) . SoundHound’s voice AI platform is also being adopted by automakers like Stellantis. 

SoundHound’s Amelia platform is also gaining prominence, allowing companies to develop AI agents that increase employee productivity and improve customer service. Recently, SoundHound secured a significant agreement with a U.S.-based regional hospital system to implement the Amelia platform. Overall, the rising demand for SoundHound’s products is driving the company’s revenue growth. 

SoundHound’s revenues for the third quarter reached $42 million, up 68% year over year, according to investors.soundhound.com. Management expects SoundHound to benefit from the surge in enterprise AI adoption, projecting full-year revenues between $165 million and $180 million, up from an earlier outlook of $160 million to $178 million. 

NVIDIA Overcomes AI Bubble Fears With Stellar Q3 Performance 

NVIDIA’s fiscal third-quarter 2026 revenue growth dismisses AI bubble concerns. Strong demand for its advanced Blackwell chips and cloud graphics processing units (GPUs) helped NVIDIA report revenues of $57 billion for the quarter, up 62% from the previous year and 22% sequentially, according to investor.nvidia.com

NVIDIA’s data center revenues soared 66% year over year to $51.2 billion for the quarter, while gaming revenues jumped 30% to $4.3 billion. Additionally, NVIDIA’s competitive edge in the AI hardware market is expected to fuel growth, with management projecting revenues for the fiscal fourth quarter of 2026 to reach $65 billion, with a 2% margin of error. 

Looking ahead, NVIDIA recently received approval from the Trump administration to ship its H200 AI processors to “approved customers” in China. This marks a strategic win for NVIDIA, which has been lobbying Congress to ease export restrictions and enhance its sales. 

SoundHound or NVIDIA: Which AI Stock Should You Pick for 2026? 

Both SoundHound and NVIDIA demonstrate strong revenue growth prospects. However, SoundHound’s efforts to attract customers through aggressive investments are increasing operating costs, leading to losses and a decline in its stock. 

SoundHound’s GAAP net loss for the third quarter was $109.3 million, while non-GAAP net loss was $13 million. In contrast, NVIDIA continues to generate strong profits, with fiscal third-quarter 2026 net income reaching $31.91 billion, up from $19.31 billion a year ago. And it's solely because of its strong presence in the AI hardware as well as software market. 

Additionally, NVIDIA is demonstrating solid financial strength, having returned $37 billion to shareholders via share repurchases and cash dividends during the first nine months of fiscal 2026. Therefore, it’s prudent for savvy investors to invest in NVIDIA rather than SoundHound as the new year approaches. 

For now, NVIDIA has a Zacks Rank #1 (Strong Buy), whereas SoundHound has a Zacks Rank #4 (Sell).  

You can see the complete list of today’s Zacks Rank #1 stocks here.
 

Published in