The article compares SoundHound AI (SOUN) and BigBear.ai (BBAI), two AI companies that went public via SPACs and saw significant stock appreciation, noting both are currently expensive due to AI hype. SoundHound, focused on voice recognition, reported strong revenue growth (187% in 1H 2025) but declining gross margins and unprofitability, trading at 28x 2027 projected sales. BigBear.ai, specializing in AI for data analysis and government contracts, experienced revenue stagnation and declines (down 8% in 1H 2025) despite a growing backlog, also remaining unprofitable and valued at 17x 2027 sales. The analyst, while cautious on both, ultimately favors SoundHound AI due to its faster growth, healthier gross margins, and fewer direct competitors in the expanding voice AI market.
The article compares SoundHound AI (SOUN) and BigBear.ai (BBAI), two AI companies that went public via SPACs and are now considered overvalued. Both are GAAP unprofitable, with SOUN trading at 28x and BBAI at 17x their 2027 projected sales, reflecting significant AI market hype. SoundHound AI, focused on voice recognition, reported 187% revenue growth in 1H 2025, but adjusted gross margin fell from 76.2% in 2023 to 55.3% in 1H 2025. Analysts project a 47% revenue CAGR through 2027, anticipating margin recovery. BigBear.ai, specializing in AI for data analysis and government contracts, saw near-flat revenue in 2023 and 2% growth in 2024. Revenue declined 8% in 1H 2025, and gross margin contracted to 23.1%. The analysis ultimately favors SoundHound AI due to its faster growth, healthier gross margins, and fewer direct competitors. BigBear.ai's near-term outlook is dimmer, relying on backlog conversion by 2026-2027, and both stocks carry substantial valuation risk.
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mildly negative
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-0.30
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