Investors Eye AI Leaders: SoundHound vs. Broadcom

NEW YORK, NY — The artificial intelligence (AI) sector continues to transform numerous industries, capturing the attention of investors. Two companies leading the charge are SoundHound AI and Broadcom, with their respective share prices rising significantly in the past year.

SoundHound AI, a conversational AI company, has seen its shares increase by 85%. Meanwhile, Broadcom, a semiconductor giant, has had an impressive gain of 64% during the same timeframe. Investors are now weighing which company presents a better long-term opportunity.

Broadcom’s application-specific integrated circuits (ASICs) are essential for AI data center infrastructure. Tech giants such as Alphabet and Meta utilize Broadcom’s custom AI processors to gain a competitive edge. As the global AI chip market is projected to reach $334 billion by 2030, Broadcom’s AI revenue has surged, accounting for 28% of its total sales, growing by 77% to $4.1 billion in Q1 2025.

Looking ahead, Broadcom’s management anticipates a second-quarter AI revenue jump to $4.4 billion, reflecting a 44% increase from the previous year. However, potential investors should take note of the company’s high P/E ratio of 107, significantly above the S&P 500 average of 28.

On the other hand, SoundHound AI provides advanced conversational tools that major companies, including Stellantis, employ for in-vehicle voice commands and other applications. In its latest quarter, SoundHound’s sales skyrocketed by 151% to $29 million. With no debt and $246 million in cash, the company is well-positioned for growth, as the conversational AI market is expected to reach $152 billion in the coming years.

Despite its rapid growth, SoundHound is currently not profitable, reporting a loss per share of $0.06. This sharp contrast raises concerns as it trades at a P/S ratio of 34, well above the software application industry average.

Both SoundHound and Broadcom have merits for investors. However, Broadcom may stand out due to its profitability and established position in the AI semiconductor market. As the AI space evolves, a buy-and-hold strategy with either company could be a wise investment, though Broadcom currently offers a greater balance of growth and profitability.

Suzanne Frey, an executive at Alphabet, and Randi Zuckerberg, a Meta Platforms official, are among board members at The Motley Fool, which holds positions in both companies.