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SoundHound vs. BigBear.ai: Which AI Stock Has More Upside?
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Key Takeaways
SoundHound posted Q1 2026 revenue up 52% to $44.2M and launched its OASYS agentic AI platform.
SoundHound's planned LivePerson buy aims to expand omnichannel reach and target a $500M revenue opportunity.
BigBear.ai landed a classified $53M ceiling contract, but Q1 revenue fell 1%, and net loss hit $56.8M.
Artificial intelligence stocks remain among the market’s most volatile yet closely watched investment themes in 2026. Investors continue searching for smaller AI companies that could emerge as long-term winners as enterprise AI adoption accelerates across industries. Two names drawing increasing attention are SoundHound AI (SOUN - Free Report) and BigBear.ai Holdings, Inc. (BBAI - Free Report)
Both companies operate in specialized AI markets and are positioning themselves around mission-critical enterprise applications rather than general-purpose consumer AI. SoundHound focuses on conversational and agentic AI across automotive, restaurants, retail and customer service, while BigBear.ai concentrates on defense, homeland security, logistics and travel-related AI solutions. Both companies are also pursuing growth through acquisitions, platform expansion and deeper enterprise relationships.
However, the stocks have struggled this year amid broader volatility in speculative AI names. Investors are now evaluating which company has the stronger long-term opportunity, better execution profile and more attractive risk-reward setup.
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 remains one of the more ambitious pure-play conversational AI companies in the market. The company is aggressively building a broad agentic AI ecosystem spanning voice, text, commerce and customer service automation.
The company’s first-quarter 2026 results highlighted strong momentum. Revenue increased 52% year over year to $44.2 million, while its core automotive and IoT AI business grew 88% excluding acquisitions. Management said demand remained strong across restaurants, automotive, retail, banking and enterprise customer service. The company also launched OASYS, its self-learning orchestrated agentic AI platform designed to automate the entire lifecycle of AI agents.
A major growth catalyst is the planned acquisition of LivePerson. The transaction significantly expands SoundHound’s enterprise reach across digital messaging and omnichannel customer engagement. The combined platform is expected to create a broader conversational AI ecosystem spanning voice, chat, mobile and digital workflows. Management believes the combination creates a potential $500 million revenue opportunity while also accelerating the path toward profitability.
Importantly, the acquisition gives SoundHound exposure to a massive enterprise footprint, including 25 Fortune 100 customers, large global banks, airlines and telecommunications companies. The company is also benefiting from strong cross-selling opportunities as LivePerson customers increasingly seek voice AI capabilities.
Another positive is SoundHound’s growing diversification. The company is no longer dependent only on automotive voice assistants. It is rapidly expanding across restaurant automation, drive-thru AI, customer support automation and enterprise AI orchestration. Management highlighted strong adoption across retail chains, fitness brands and financial institutions.
The company is also investing heavily in proprietary AI infrastructure. Management stated that OASYS increasingly relies on SoundHound’s own speech foundation models rather than expensive third-party frontier models. This could eventually improve margins and strengthen competitive positioning.
Still, risks remain significant. SoundHound continues to generate sizable losses. First-quarter adjusted EBITDA loss was $26.7 million, while GAAP gross margin was only 31.1%. Operating expenses also remain elevated as the company invests aggressively in R&D, sales expansion and acquisitions.
Execution risk surrounding acquisitions also cannot be ignored. SoundHound has completed multiple acquisitions in a short period, and integrating LivePerson could prove complex. Investors are effectively betting that management can successfully combine different platforms while simultaneously scaling growth and improving profitability.
Valuation is another concern. SoundHound trades at a premium forward sales multiple despite ongoing losses and uncertain long-term profitability. That leaves little room for operational missteps.
The Case for BigBear.ai Stock
BigBear.ai offers a very different AI investment story centered around defense, national security and mission-critical government AI systems. Unlike many consumer-focused AI companies, BigBear.ai’s business is closely tied to government modernization, border security, logistics optimization and military AI applications. The company’s positioning could benefit from rising geopolitical tensions and increasing AI adoption within defense agencies. Management continues to emphasize strong demand across national security and trade and travel markets.
BigBear.ai reported several notable contract wins during the first quarter, including a classified sole-source intelligence contract with an approximate ceiling value of $53 million. The company also secured airport security contracts at Chicago O’Hare and Dallas-Fort Worth and expanded its Shipyard AI and Ask Sage platforms into defense and naval applications.
One encouraging trend is the improving revenue mix. BigBear.ai is increasingly shifting from lower-margin services to higher-margin AI platforms and generative AI software offerings. Management specifically noted that Ask Sage is contributing to stronger margins and more technology-oriented revenue streams.
The balance sheet has also improved materially. BigBear.ai ended the first quarter with $431.5 million in cash and investments after settling most of its convertible debt obligations. This provides the company with significantly more financial flexibility than it had in prior years.
Backlog growth was another positive. Backlog increased 14% sequentially to $281.9 million, supported by large defense-related contract wins. Gross margin also expanded sharply from 21.3% to 34% year over year.
However, BigBear.ai still faces major challenges. Revenue growth remains inconsistent. First-quarter revenue actually declined 1% year over year to $34.4 million. The company remains highly dependent on government contracts, procurement cycles and budget timing, which can create unpredictable revenue patterns.
Profitability also remains weak. The company reported a first-quarter net loss of $56.8 million. While much of this included non-cash charges tied to debt extinguishment and derivatives, BigBear.ai still has meaningful execution risk as it transitions toward a higher-margin AI software model.
Another challenge is competitive intensity. Large defense contractors and major cloud vendors are increasingly targeting government AI opportunities. BigBear.ai must continue proving that its specialized mission expertise and agility can offset its much smaller scale.
Market Momentum Paints a Mixed Picture
Both stocks have struggled in 2026 despite ongoing enthusiasm around AI spending trends. SoundHound stock is down 16.2% year to date, while BigBear.ai has plunged 27.4%. Both have underperformed the broader Zacks Computer and Technology sector, which has gained 16.8%, and the S&P 500, which is up 9.1%. SOUN has fared better than the Zacks Computers - IT Services industry, which has fallen 21%, while BBAI has underperformed the industry.
The relative weakness reflects investor caution toward speculative AI stocks that remain unprofitable and highly execution dependent.
SOUN vs BBAI Price Performance (YTD)
Image Source: Zacks Investment Research
Valuation Gap Reflects Different Risk Profiles
Valuation remains demanding for both companies despite recent stock pullbacks. SoundHound currently trades at 14.2X forward 12-month sales, while BigBear.ai trades at 12.37X. Both remain above the Zacks Computers - IT Services industry average of 11.72X.
SoundHound commands the higher multiple largely because of its faster revenue growth profile, broader enterprise AI exposure and perceived long-term platform opportunity. BigBear.ai’s somewhat lower valuation reflects slower growth and greater dependence on government contracts.
SOUN vs BBAI Valuation (P/E F12M)
Image Source: Zacks Investment Research
Estimate Revisions Highlight Diverging Sentiment
Analysts estimate trends currently favor BigBear.ai modestly. Over the past 30 days, the Zacks Consensus Estimate for SoundHound’s 2026 loss widened to 11 cents from 9 cents. However, analysts still expect revenue growth of 38% for 2026 and narrower losses versus last year’s reported loss of 13 cents per share.
SOUN EPS Estimate
Image Source: Zacks Investment Research
For BigBear.ai, the 2026 loss estimate narrowed meaningfully to 25 cents from 35 cents over the past month. Analysts also expect losses to improve sharply from the prior year’s reported loss of 82 cents per share. Revenue is projected to grow 13% in 2026.
The estimate revisions suggest improving confidence in BigBear.ai’s cost structure and balance-sheet stabilization. Still, SoundHound continues to command stronger top-line growth expectations.
BBAI EPS Estimate
Image Source: Zacks Investment Research
Which AI Stock Has More Upside?
Both companies operate in attractive AI markets and possess differentiated technology positioning. However, SoundHound currently appears to offer the stronger long-term upside profile.
SoundHound benefits from significantly faster expected revenue growth, broader enterprise diversification, stronger commercial AI adoption trends and a potentially transformative conversational AI platform opportunity. Its OASYS launch and planned LivePerson acquisition could substantially expand its enterprise footprint and long-term monetization opportunities.
BigBear.ai’s defense and homeland security exposure remains compelling, especially amid rising geopolitical tensions and increasing government AI spending. The company’s improving balance sheet, stronger backlog and expanding generative AI platform business are encouraging. However, slower revenue growth, higher government dependency and execution risks remain concerns.
SoundHound currently carries a Zacks Rank #3 (Hold), while BigBear.ai carries a Zacks Rank #4 (Sell). Given the stronger growth outlook, broader AI opportunity and more favorable earnings profile, SoundHound appears better positioned for investors seeking higher long-term upside potential despite its elevated risk profile.
View the Zacks #1 Rank List
Image: Bigstock
SoundHound vs. BigBear.ai: Which AI Stock Has More Upside?
Key Takeaways
Artificial intelligence stocks remain among the market’s most volatile yet closely watched investment themes in 2026. Investors continue searching for smaller AI companies that could emerge as long-term winners as enterprise AI adoption accelerates across industries. Two names drawing increasing attention are SoundHound AI (SOUN - Free Report) and BigBear.ai Holdings, Inc. (BBAI - Free Report)
Both companies operate in specialized AI markets and are positioning themselves around mission-critical enterprise applications rather than general-purpose consumer AI. SoundHound focuses on conversational and agentic AI across automotive, restaurants, retail and customer service, while BigBear.ai concentrates on defense, homeland security, logistics and travel-related AI solutions. Both companies are also pursuing growth through acquisitions, platform expansion and deeper enterprise relationships.
However, the stocks have struggled this year amid broader volatility in speculative AI names. Investors are now evaluating which company has the stronger long-term opportunity, better execution profile and more attractive risk-reward setup.
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 remains one of the more ambitious pure-play conversational AI companies in the market. The company is aggressively building a broad agentic AI ecosystem spanning voice, text, commerce and customer service automation.
The company’s first-quarter 2026 results highlighted strong momentum. Revenue increased 52% year over year to $44.2 million, while its core automotive and IoT AI business grew 88% excluding acquisitions. Management said demand remained strong across restaurants, automotive, retail, banking and enterprise customer service. The company also launched OASYS, its self-learning orchestrated agentic AI platform designed to automate the entire lifecycle of AI agents.
A major growth catalyst is the planned acquisition of LivePerson. The transaction significantly expands SoundHound’s enterprise reach across digital messaging and omnichannel customer engagement. The combined platform is expected to create a broader conversational AI ecosystem spanning voice, chat, mobile and digital workflows. Management believes the combination creates a potential $500 million revenue opportunity while also accelerating the path toward profitability.
Importantly, the acquisition gives SoundHound exposure to a massive enterprise footprint, including 25 Fortune 100 customers, large global banks, airlines and telecommunications companies. The company is also benefiting from strong cross-selling opportunities as LivePerson customers increasingly seek voice AI capabilities.
Another positive is SoundHound’s growing diversification. The company is no longer dependent only on automotive voice assistants. It is rapidly expanding across restaurant automation, drive-thru AI, customer support automation and enterprise AI orchestration. Management highlighted strong adoption across retail chains, fitness brands and financial institutions.
The company is also investing heavily in proprietary AI infrastructure. Management stated that OASYS increasingly relies on SoundHound’s own speech foundation models rather than expensive third-party frontier models. This could eventually improve margins and strengthen competitive positioning.
Still, risks remain significant. SoundHound continues to generate sizable losses. First-quarter adjusted EBITDA loss was $26.7 million, while GAAP gross margin was only 31.1%. Operating expenses also remain elevated as the company invests aggressively in R&D, sales expansion and acquisitions.
Execution risk surrounding acquisitions also cannot be ignored. SoundHound has completed multiple acquisitions in a short period, and integrating LivePerson could prove complex. Investors are effectively betting that management can successfully combine different platforms while simultaneously scaling growth and improving profitability.
Valuation is another concern. SoundHound trades at a premium forward sales multiple despite ongoing losses and uncertain long-term profitability. That leaves little room for operational missteps.
The Case for BigBear.ai Stock
BigBear.ai offers a very different AI investment story centered around defense, national security and mission-critical government AI systems. Unlike many consumer-focused AI companies, BigBear.ai’s business is closely tied to government modernization, border security, logistics optimization and military AI applications. The company’s positioning could benefit from rising geopolitical tensions and increasing AI adoption within defense agencies. Management continues to emphasize strong demand across national security and trade and travel markets.
BigBear.ai reported several notable contract wins during the first quarter, including a classified sole-source intelligence contract with an approximate ceiling value of $53 million. The company also secured airport security contracts at Chicago O’Hare and Dallas-Fort Worth and expanded its Shipyard AI and Ask Sage platforms into defense and naval applications.
One encouraging trend is the improving revenue mix. BigBear.ai is increasingly shifting from lower-margin services to higher-margin AI platforms and generative AI software offerings. Management specifically noted that Ask Sage is contributing to stronger margins and more technology-oriented revenue streams.
The balance sheet has also improved materially. BigBear.ai ended the first quarter with $431.5 million in cash and investments after settling most of its convertible debt obligations. This provides the company with significantly more financial flexibility than it had in prior years.
Backlog growth was another positive. Backlog increased 14% sequentially to $281.9 million, supported by large defense-related contract wins. Gross margin also expanded sharply from 21.3% to 34% year over year.
However, BigBear.ai still faces major challenges. Revenue growth remains inconsistent. First-quarter revenue actually declined 1% year over year to $34.4 million. The company remains highly dependent on government contracts, procurement cycles and budget timing, which can create unpredictable revenue patterns.
Profitability also remains weak. The company reported a first-quarter net loss of $56.8 million. While much of this included non-cash charges tied to debt extinguishment and derivatives, BigBear.ai still has meaningful execution risk as it transitions toward a higher-margin AI software model.
Another challenge is competitive intensity. Large defense contractors and major cloud vendors are increasingly targeting government AI opportunities. BigBear.ai must continue proving that its specialized mission expertise and agility can offset its much smaller scale.
Market Momentum Paints a Mixed Picture
Both stocks have struggled in 2026 despite ongoing enthusiasm around AI spending trends. SoundHound stock is down 16.2% year to date, while BigBear.ai has plunged 27.4%. Both have underperformed the broader Zacks Computer and Technology sector, which has gained 16.8%, and the S&P 500, which is up 9.1%. SOUN has fared better than the Zacks Computers - IT Services industry, which has fallen 21%, while BBAI has underperformed the industry.
The relative weakness reflects investor caution toward speculative AI stocks that remain unprofitable and highly execution dependent.
SOUN vs BBAI Price Performance (YTD)
Image Source: Zacks Investment Research
Valuation Gap Reflects Different Risk Profiles
Valuation remains demanding for both companies despite recent stock pullbacks. SoundHound currently trades at 14.2X forward 12-month sales, while BigBear.ai trades at 12.37X. Both remain above the Zacks Computers - IT Services industry average of 11.72X.
SoundHound commands the higher multiple largely because of its faster revenue growth profile, broader enterprise AI exposure and perceived long-term platform opportunity. BigBear.ai’s somewhat lower valuation reflects slower growth and greater dependence on government contracts.
SOUN vs BBAI Valuation (P/E F12M)
Image Source: Zacks Investment Research
Estimate Revisions Highlight Diverging Sentiment
Analysts estimate trends currently favor BigBear.ai modestly. Over the past 30 days, the Zacks Consensus Estimate for SoundHound’s 2026 loss widened to 11 cents from 9 cents. However, analysts still expect revenue growth of 38% for 2026 and narrower losses versus last year’s reported loss of 13 cents per share.
SOUN EPS Estimate
Image Source: Zacks Investment Research
For BigBear.ai, the 2026 loss estimate narrowed meaningfully to 25 cents from 35 cents over the past month. Analysts also expect losses to improve sharply from the prior year’s reported loss of 82 cents per share. Revenue is projected to grow 13% in 2026.
The estimate revisions suggest improving confidence in BigBear.ai’s cost structure and balance-sheet stabilization. Still, SoundHound continues to command stronger top-line growth expectations.
BBAI EPS Estimate
Image Source: Zacks Investment Research
Which AI Stock Has More Upside?
Both companies operate in attractive AI markets and possess differentiated technology positioning. However, SoundHound currently appears to offer the stronger long-term upside profile.
SoundHound benefits from significantly faster expected revenue growth, broader enterprise diversification, stronger commercial AI adoption trends and a potentially transformative conversational AI platform opportunity. Its OASYS launch and planned LivePerson acquisition could substantially expand its enterprise footprint and long-term monetization opportunities.
BigBear.ai’s defense and homeland security exposure remains compelling, especially amid rising geopolitical tensions and increasing government AI spending. The company’s improving balance sheet, stronger backlog and expanding generative AI platform business are encouraging. However, slower revenue growth, higher government dependency and execution risks remain concerns.
SoundHound currently carries a Zacks Rank #3 (Hold), while BigBear.ai carries a Zacks Rank #4 (Sell). Given the stronger growth outlook, broader AI opportunity and more favorable earnings profile, SoundHound appears better positioned for investors seeking higher long-term upside potential despite its elevated risk profile.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.