Better Artificial Intelligence Stock: SoundHound AI vs. Navitas Semiconductor

The booming artificial intelligence (AI) sector offers a variety of stocks to invest in. Two to consider are SoundHound AI (NASDAQ: SOUN) and Navitas Semiconductor (NASDAQ: NVTS). These companies give you exposure to different areas of the AI industry.

The former specializes in consumer-facing, voice-activated AI and represents a stake in AI software. The latter operates behind the scenes, supplying semiconductor components to the data centers that house AI systems, and would serve as an AI hardware play.

Between SoundHound and Navitas, one may prove to be the superior AI investment. To determine which, here's a deeper look into each company.

Image source: Getty Images.

SoundHound's pros and cons

SoundHound's technology is an impressive example of AI-powered voice conversations. Its agentic AI bots can perform actions for you, including ordering food and making travel reservations through devices such as your TV or from inside your car.

In January, the company announced its Vision AI product, which integrates with a vehicle's cameras to "see" its surroundings. This ability allows drivers to ask AI to perform tasks based on the environment, such as dialing a phone number on a billboard or translating a nearby sign.

On Jan. 21, the company partnered with Bridgepointe Technologies to help Bridgepointe's customers adopt SoundHound's solutions. These clients include hotel chain Marriott and auto giant Toyota. The deal has the potential to expand SoundHound's sales, which are already soaring.

Revenue reached a record $42 million in the third quarter of 2025, a 68% year-over-year increase. SoundHound continues to grow sales by expanding its platform capabilities. It's doing so quickly by acquiring businesses working on voice-enabled AI tech.

But the acquisitions contributed to escalating operating costs, which rose a massive 243% year over year to $115.9 million in Q3. This kind of expense growth is concerning since it isn't sustainable over the long run.

The company's saving grace is the expectation of ongoing robust revenue growth. It forecasted 2025 full-year sales between $165 million and $180 million, almost double the $84.7 million made in 2024.

Navitas Semiconductor's major business shift

Navitas develops gallium nitride integrated circuits for power conversion and charging, which deliver faster charging, higher power density, and greater energy savings compared to silicon-based systems.

These qualities are desirable for AI data centers, which require substantial energy for the computing infrastructure and cooling systems necessary to operate. As a result, Navitas management sees tremendous upside in servicing AI customers. However, there's a catch.

Navitas wasn't always focused on AI. It had a significant business selling mobile and consumer-related components to the Chinese market, which accounted for 60% of revenue in 2024. In 2025, the company decided to pivot to AI and allow its products for China to sell down. A consequence of this decision is that its sales collapsed. In Q3 2025, Navitas revenue plunged to $10.1 million from 2024's $21.7 million.

As a result, Navitas is not profitable with a Q3 net loss of $19.2 million. The company is working to reduce operating expenses, which totaled $23.2 million in Q3, down from $37.6 million in the previous year.

Still, Navitas forecasted sales to continue falling in Q4 2025, dropping to $7 million compared to $18 million in 2024. It expects to turn a corner this year, with revenue gradually growing as 2026 progresses thanks to its new AI focus.

Deciding between SoundHound and Navitas stocks

Purchasing stock in either SoundHound or Navitas requires a leap of faith. For the former, an investment hinges on the belief SoundHound can sustain robust sales growth while gradually getting costs under control. For the latter, investors must trust Navitas' AI gambit will pay off.

Another consideration is share-price valuation. Since neither company is profitable, this can be assessed using the forward price-to-sales (P/S) ratio, which measures how much investors must pay for every dollar of projected revenue over the next 12 months.

Data by YCharts.

The chart reveals SoundHound's forward sales multiple hovers around a low point for the past year, while the opposite is true for Navitas. This suggests Navitas stock is pricey, especially given its forward P/S ratio is about triple SoundHound's.

Perhaps Navitas will make an attractive AI investment in time. But given its sky-high valuation and declining sales, the prudent approach is to wait for its Q1 2026 earnings to see whether its revenue rebounds from Q4 2025's projected $7 million.

This means SoundHound is the more compelling stock to buy. The AI voice expert's lower valuation and rising sales help it edge out Navitas as the more attractive investment right now.

Robert Izquierdo has positions in SoundHound AI and Toyota Motor. The Motley Fool has positions in and recommends SoundHound AI. The Motley Fool recommends Marriott International. The Motley Fool has a disclosure policy.