SOUN vs. BBAI: Which AI Stock Is the Better Buy Ahead of Q4 Earnings?

SoundHound AI SOUN +0.13% ▲ and BigBear.ai BBAI -3.89% ▼ are two small-cap, pure-play AI companies preparing to report earnings this week. SoundHound is set to announce its Q4 2025 results on February 26, while BigBear.ai will report on March 2. Using TipRanks’ Stock Comparison tool, we compared SOUN and BBAI across key metrics to see which stock appears to be the better Buy ahead of earnings. Analysts have a Strong Buy rating on SOUN, while BBAI has a Hold rating. SOUN stock has a price target of $16.60, implying an upside of 112%, while BBAI’s stock price target of $6.0 implies an upside of 61%.

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For context, SoundHound focuses on voice and conversational AI for enterprises and automotive clients, while BigBear.ai specializes in data analytics and government-focused AI solutions. So far this year, SOUN stock has declined by 22%, while BBAI slipped over 30%.

Let’s take a look at these stocks in detail.

SOUN vs. BBAI: Valuation Risks

SoundHound AI trades at a rich valuation, reflecting high growth expectations but leaving little room for disappointment. The stock has a trailing 12-month price-to-sales ratio of 20.83, well above the sector average of 3.25. Any slowdown in growth or increase in competition could put pressure on shares.

On the other hand, BigBear.ai appears cheaper by comparison, with a price-to-sales ratio of 9.06. However, its slower growth and ongoing financial challenges temper that discount. The company’s heavy dependence on government contracts can make revenue less predictable, and profit margins remain thin.

Is SOUN a Good Stock to Buy?

Wall Street expects SoundHound AI to report a loss of $0.10 per share, marking a sharp improvement from the $0.69 per share loss recorded a year ago. Meanwhile, revenue is projected to surge more than 55% year over year to approximately $53.98 million. For the full year, the company has guided for revenue between $165 million and $180 million — nearly double the $84.7 million it generated in 2024.

SoundHound AI remains firmly in growth mode and has yet to reach profitability. The company continues to report losses as it invests aggressively in expanding its technology platform and customer base. However, management expects those losses to narrow in the coming quarters as it moves closer to breakeven. Additionally, strong revenue growth and raised guidance point to compelling long-term potential. Increasing customer demand and a broadening product portfolio could help sustain momentum, provided execution remains solid.

On Wall Street, analyst Scott Buck at Wainwright has a Street-high price target of $26 on SOUN, implying an upside of over 200% from current levels. Buck said SoundHound aims to reach adjusted EBITDA break-even by late 2026 while continuing to focus on growth. That strategy may pressure short-term margins, but the company remains financially strong, with strong revenue growth expected through 2026.

Is BBAI a Good Stock to Buy?

Wall Street expects BigBear.ai to report a narrower loss of about $0.06 per share in Q4 2025, compared with a loss of $0.43 per share a year earlier. However, revenue is projected to decline to roughly $33.32 million, down from $43.8 million in the year-ago quarter. BigBear is facing pressure from U.S. government spending cuts, though it is trying to expand and diversify its customer base. In Q3 2025, revenue fell 20% year over year to $33.1 million, mainly due to lower activity on certain U.S. Army programs.

BBAI may appeal to high-risk, high-reward investors who believe in its long-term government AI opportunity, but the stock comes with notable risks. It is not consistently profitable, margins remain thin, and its heavy reliance on government contracts can make revenue uneven and dependent on budget cycles.

On Wall Street, BBAI stock carries a Hold rating from Cantor Fitzgerald five-star analyst Jonathan Ruykhaver. In January, he downgraded BBAI from Buy to Hold and lowered his price target to $6 from $7. He said go-to-market challenges and pressure on profit margins were the main reasons for lowering his rating on BBAI. These issues reflect the company’s financial situation, as it is still unprofitable and analysts expect losses to continue this year.

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