Palantir or SoundHound AI: Better AI Investment?

Published Date : 10/09/2025 

The global AI market is projected to grow to $1.81 trillion by 2030, making AI stocks highly lucrative. This article compares Palantir Technologies and SoundHound AI, two prominent players in the AI sector, to determine which is a better investment. 

The artificial intelligence (AI) market is one of the most lucrative and surefire investing opportunities right now. Companies are rapidly integrating AI-powered products to assist with customer service, smart devices, manufacturing, inventory management, diagnostics, and more. According to Grand View Research, the global market size for AI was $279.2 billion in 2024. This figure is projected to soar to $1.81 trillion by 2030, growing at a compound annual growth rate (CAGR) of 35.9%. It's no wonder that AI stocks are so popular and profitable these days.

Palantir Technologies (PLTR) and SoundHound AI (SOUN) are two of the most interesting AI stocks on the market right now. Both companies are leveraging AI in unique ways, but which is the better investment?

Palantir's Momentum

Palantir Technologies, a leading data analytics company, has been a significant winner on Wall Street over the last 18 months. However, the company is currently facing some adversity. Palantir shares are down 18% from all-time highs set a month ago. This decline was partly due to a report by Citron Research, which called the company 'detached from fundamentals and analysis.'

While Citron's concerns about Palantir's valuation are valid, the company's momentum and potential are hard to ignore. Palantir's trailing price-to-earnings (P/E) ratio is 510, and its forward P/E is 238. Even in a year, the projected forward P/E is still a staggering 180. These numbers are indeed eye-popping, but they reflect the market's confidence in Palantir's growth prospects.

Palantir uses artificial intelligence to crunch data from hundreds of sources, helping both commercial and government clients make real-time decisions. For companies, this means using Palantir's Artificial Intelligence Platform to optimize workflows, inventory, supply chains, and resources. Palantir is working with healthcare companies to manage clinical trials, retailers to enhance store operations and marketing, and the aviation industry to improve navigation. The company is also expanding its government work, collaborating with agencies like the State Department, Homeland Security, and Health & Human Services.

Palantir's revenue is expected to jump from $4.16 billion this year to $7.62 billion by 2027. This growth is just the beginning, as Palantir continues to innovate and expand its client base.

SoundHound's Potential

While Palantir is growing by leaps and bounds, SoundHound AI is still at the beginning of its growth story. SoundHound focuses on creating AI-assisted voice solutions, enabling natural language interactions with platforms. The company has an array of customers, including major automotive companies like Hyundai, Honda, and Stellantis. It also works with Block (formerly Square) to improve point-of-sale systems and with Oracle to develop software for voice-activated restaurant orders. Other notable clients include Pandora, Snap, and Motorola Solutions.

SoundHound's revenue is expected to grow, but not as aggressively as Palantir's. The company's revenues this year are projected to be $166.2 million, rising 29% next year to $214.6 million, and 25% in 2027 to $269.17 million. While Palantir has a unique moat, SoundHound faces serious competition from major AI players like Amazon's Alexa, Alphabet's Google Assistant, and Microsoft's Copilot.

Which is the Better Investment?

This comparison comes down to Palantir's potential and high valuation versus SoundHound's solid company with a significant market opportunity. SoundHound had a strong second quarter, bringing in $42.7 million in revenue, up 217% from the previous year. Palantir's second quarter was also impressive, with the company recording $1 billion in quarterly revenue for the first time and a 48% increase from the previous year.

For some investors, Palantir's high valuation might be a deal-breaker. However, the company's rapid commercial adoption, increased government usage, and unchallenged moat make it a compelling investment. Despite the speculative nature of SoundHound AI, Palantir's established position and numerous tailwinds make it the better choice for many investors.

In conclusion, while both companies offer promising opportunities in the AI sector, Palantir's established track record and growth potential make it the better investment. 

Frequently Asked Questions (FAQS): 

Q: What is the projected growth of the AI market by 2030?

A: The global AI market is projected to grow to $1.81 trillion by 2030, with a compound annual growth rate (CAGR) of 35.9%.

Q: What is Palantir Technologies known for?

A: Palantir Technologies is known for its data analytics and artificial intelligence platform, which helps both commercial and government clients make real-time decisions. The company works with healthcare, retail, and aviation industries, among others.

Q: What is SoundHound AI's primary focus?

A: SoundHound AI focuses on creating AI-assisted voice solutions, enabling natural language interactions with platforms. It works with major automotive companies, retailers, and software developers to improve various services.

Q: What are the current revenue projections for Palantir and SoundHound?

A: Palantir's revenue is expected to jump from $4.16 billion this year to $7.62 billion by 2027. SoundHound's revenues this year are projected to be $166.2 million, rising 29% next year to $214.6 million, and 25% in 2027 to $269.17 million.

Q: Why might Palantir be considered a better investment than SoundHound?

A: Palantir's established track record, rapid commercial adoption, increased government usage, and unchallenged moat make it a compelling investment despite its high valuation. SoundHound, while promising, faces significant competition from major AI players. 

More Related Topics :