When it comes to artificial intelligence (AI) stocks, investors are always looking for the next big opportunity. In this blog post, we will be evaluating two AI stocks, SoundHound AI (SOUN) and C3.ai (AI), to see which one might be a better investment option. At Extreme Investor Network, we always strive to provide our readers with valuable insights and analysis to help them make informed decisions in the world of finance.
SoundHound AI is a company that provides conversational intelligence through its independent voice-AI platform, allowing businesses to enhance their customer experiences. On the other hand, C3.ai is an enterprise AI company that offers software-as-a-service applications for developing, deploying, and managing large-scale enterprise AI applications.
In terms of stock performance, SoundHound AI has had an impressive 128% surge year-to-date, while C3.ai shares have declined by 6.5% during the same period. This significant difference in performance has resulted in a notable gap in their valuations. Since both companies are not yet profitable, we can compare their price-to-sales (P/S) ratios against each other and the broader application software industry for a better perspective.
At an elevated P/S ratio of 32x, SoundHound AI is trading at a premium compared to the application software industry. While being an AI stock justifies some premium, it is essential to note that the company is not profitable at the moment. With a market capitalization of $4.5 billion and negative net income margins, caution is advised for investors.
On the bright side, SoundHound AI has been expanding its partnership with Stellantis, a top-10 automaker, by incorporating its voice AI technology into more vehicle brands in Europe. This strategic move could signify potential growth opportunities in the long run. Despite these positive developments, the lack of profitability raises concerns about the high valuation and premium it commands in the market.
On the other hand, C3.ai is trading at a more reasonable P/S ratio of 11.4x compared to SoundHound AI. However, the company’s profitability prospects seem challenging, with widening net losses and uncertain projections for future profitability. While C3.ai serves the enterprise market and holds strategic partnerships with tech giants like Microsoft and Adobe, it remains a show-me story for now.
In conclusion, both SoundHound AI and C3.ai show promise for long-term success, but it might be too early to consider investing in these stocks. At Extreme Investor Network, we believe in waiting for more clarity on their paths to profitability before recommending them as potential investment opportunities. Stay tuned for more expert insights and analysis on finance and investing on our platform.