Palantir and SoundHound AI are both high-growth AI stocks with different financial outlooks.

From Nasdaq: 2024-12-28 07:31:00

Two of the hottest AI stocks heading into 2025 are Palantir Technologies (PLTR) and SoundHound AI (SOUN), with Palantir up 400% and SoundHound AI up 900% in 2024. Both are on the cutting edge of AI deployment, but their finances differ, with SoundHound AI growing faster and trading at a higher price-to-sales ratio.

Palantir focuses on purpose-built AI applications for clients, while SoundHound AI uses audio input for AI models and partners with major players like Nvidia. Palantir’s revenue rose 30% YoY to $725 million, while SoundHound AI’s increased 89% to $25 million in Q3. Despite Palantir’s profitability, SoundHound AI’s revenue growth is expected to outpace Palantir’s in 2025.

Both stocks have high valuation ratios, with SoundHound AI trading at 92 times sales and Palantir at 75 times sales, making them among the most expensive stocks in the market. Palantir’s expected growth may take years to justify its valuation, while SoundHound AI’s rapid revenue growth could lead to a more reasonable valuation in the future.

Investors should carefully consider the valuation of both stocks before investing, as their stock prices have already factored in high expectations. While Palantir is more mature, SoundHound AI’s explosive growth may lead to a more favorable valuation over time. The Motley Fool Stock Advisor team has identified 10 best stocks for investors to buy now, but Palantir Technologies is not one of them.



Read more at Nasdaq: Better Artificial Intelligence (AI) Stock: Palantir vs. SoundHound AI