C3.ai vs. SoundHound: Which AI Stock Has More Upside Right Now?

C3.ai, Inc. AI and SoundHound AI, Inc. SOUN are pure-play AI companies riding the artificial intelligence investment wave. C3.ai focuses on enterprise AI applications, whereas SoundHound specializes in voice and conversational AI technology, offering distinct growth paths within the same overarching AI trend.

Over the past three months, both C3.ai and SoundHound stocks have delivered stronger returns than their broader industry and the S&P 500. During this period, shares of C3.ai have climbed 17.8%, whereas SoundHound has risen 9.3%. Meanwhile, the industry has advanced 7.4% and the S&P 500 has grown 9.2%, highlighting the relative strength of these two AI-focused stocks.

Let us delve deeper and closely compare the fundamentals of the two stocks to determine which is better placed at the moment.

The Case for C3.ai Stock

C3.ai stands at the forefront of the enterprise artificial intelligence revolution, offering a unique and differentiated value proposition as a pure-play provider of turnkey AI applications. Unlike companies that focus on infrastructure or narrow point solutions, C3.ai has built a robust library of more than 130 enterprise-grade applications designed to address real-world business challenges, from predictive maintenance and supply-chain optimization to fraud detection and drug discovery.

This breadth and depth not only accelerate adoption but also make it easier for customers to deploy AI solutions without building from scratch, giving C3.ai a compelling edge in a rapidly evolving digital economy.

The company is benefiting from the expansion of federal contracts. In fourth-quarter fiscal 2025, C3.ai witnessed a major momentum in its government partnerships, headlined by a $450-million ceiling awarded by the U.S. Air Force for the PANDA predictive maintenance platform. 

C3.ai’s AI-powered solutions are now integrated across the Air Force, Navy, Marine Corps, Missile Defense Agency and even the U.K.’s Royal Air Force. From supply-chain visibility in fuel logistics to predictive analytics for aircraft readiness, C3.ai’s agentic AI and generative platforms are delivering real-time operational advantages.

In fiscal 2025, a key driver of C3.ai’s success has been the rapid development of its partner ecosystem, which played a major role in scaling operations and enhancing customer value. About 73% of its agreements over the past year were secured through partnerships, marking a 68% increase to 193 deals.

Notably, fourth-quarter fiscal 2025 saw a 419% upsurge in partner-led bookings, with 59 agreements closed. The company’s alliance with Microsoft remained especially impactful, delivering 28 new deals in fourth-quarter fiscal 2025, mainly in the manufacturing and chemicals sectors, backed by active executive engagement and strong customer outreach at events like C3 Transform.

Ultimately, C3.ai represents a rare combination of deep technology, enterprise-grade credibility and strategic positioning in a sector poised for exponential growth. As AI continues to reshape how organizations operate, investors looking for a focused, well-aligned and forward-thinking company in the enterprise AI space may find C3.ai offers not just long-term promise but measurable traction today.

The Case for SoundHound

SoundHound is swiftly making its mark as a high-growth disruptor in the voice AI space. Riding the wave of surging demand for conversational interfaces, the company delivered a standout performance in the first quarter of 2025, with revenues soaring 151% year over year to a record $29.1 million. This explosive growth reflects the success of SoundHound’s strategic expansion, driven by targeted acquisitions and a growing list of enterprise partnerships that span fast food, automotive, and more.

A core differentiator for SoundHound lies in its scalable Houndify platform, which powers voice experiences across multiple industries. From enabling voice ordering at White Castle and Applebee’s drive-thrus to integrating into automotive systems, the company is positioning itself as the go-to provider for businesses seeking voice-enabled solutions without relying on Big Tech ecosystems.

Acquisitions have also supercharged SoundHound’s capabilities. The addition of SYNQ3, Allset, and, most notably, Amelia — a leading AI dialogue platform — has not only broadened its product suite but also accelerated its path to scale. Amelia alone is expected to contribute $45 million in recurring revenues in 2025, pushing the total revenue forecast to more than $150 million, nearly double that of 2024.

Importantly, SoundHound boasts a healthy financial foundation. With $246 million in cash and zero debt as of first-quarter 2025, the company is well-capitalized to fuel innovation and pursue growth initiatives. Its revenue base is also becoming more resilient, with no single customer accounting for more than 10% of sales in the latest quarter — a sign of growing diversification.

Yet, challenges remain. The company is still operating at a loss, with adjusted EBITDA falling to negative $22.2 million in the first quarter as spending ramped up. Another concern is stiff competition in voice AI. Companies like Amazon AMZN for Alexa, Alphabet GOOGL for Assistant and Apple AAPL for Siri invest heavily in voice AI, which could pressure an independent player. Still, SoundHound’s positioning as an independent, white-label alternative may prove compelling for clients wary of platform lock-in.

In all, SoundHound’s impressive revenue momentum, expanding platform reach and strong cash reserves make it a formidable player to watch in the evolving voice AI landscape.

Valuation

C3.ai is trading at a forward 12-month price-to-sales (P/S) ratio of 6.87X, below its three-year median of 8.32X and the Zacks Computer and Technology sector average of 5.76X.

SoundHound’s forward earnings multiple sits at 21.25X, above its three-year median of 12.12X. The C3.ai stock is trading at a discount when compared with the sector average and SOUN.

Comparing EPS Projections: AI & SOUN

The Zacks Consensus Estimate for fiscal 2026 loss per share has narrowed to 36 cents in the past 30 days. Moreover, the consensus mark for fiscal 2027 loss per share has narrowed to 12 cents from a loss of 42 cents in the same time frame.

The Zacks Consensus Estimate for 2025 loss per share has narrowed to 16 cents in the past 30 days. Moreover, the consensus mark for 2025 loss per share has narrowed to 5 cents from a loss of 8 cents in the same time frame.

End Notes

C3.ai appears better positioned than SoundHound at the moment due to its stronger traction in the enterprise AI market, deepening federal partnerships and expanding partner ecosystem that collectively provide stability and scalability. The company’s broad suite of turnkey AI applications addresses real business problems across industries and is already deployed in high-impact sectors like defense, aerospace and manufacturing. Its alignment with key partners such as Microsoft is helping drive meaningful adoption and customer growth.

While SoundHound shows impressive revenue momentum and has carved out a strong niche in conversational AI, it faces higher competitive pressure and a steeper valuation premium. Conversely, C3.ai combines improving earnings visibility with strategic positioning in a sector poised for broader institutional adoption, making it a more compelling choice for investors seeking sustainable, enterprise-level AI exposure.

AI currently has a Zacks Rank #2 (Buy), whereas SOUN carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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