SoundHound and BigBear.ai: Competing in the AI Investment Landscape

NEW YORK, NY — As artificial intelligence continues to dominate investment conversations, two small-cap stocks, SoundHound and BigBear.ai, have attracted attention among investors. Both companies, listed on the Russell 2000 index, are advancing their AI technologies and competing for market share in distinct sectors.

In the past year, both companies have seen fluctuating stock performance. As of early 2025, SoundHound has suffered a significant decline of 54% year-to-date, while BigBear.ai has experienced a smaller drop of 16%. This volatility raises questions for investors looking for opportunities within the AI sector.

SoundHound specializes in voice recognition and natural language processing solutions across various industries. Despite recent challenges, the company started 2025 strong, driven by a rising demand for voice AI. Notably, no single client accounts for more than 10% of its revenue, showcasing its diverse customer base.

However, the company faces intense competition from established players like Amazon, Google, and Apple. These tech giants are heavily investing in voice AI, which could impact SoundHound’s market share. Economic downturns may also lead to reduced tech expenditures from major clients, such as automakers and restaurants, potentially hindering SoundHound’s growth.

On the other hand, BigBear.ai focuses on providing data-driven decision intelligence primarily to the U.S. defense and government sectors. As of March 31, 2025, it reported a robust contract backlog of $385 million. The company recently secured a $13.2 million contract with the Department of Defense and has been forming partnerships with prominent firms like Amazon and Palantir, enhancing its trust in the market.

Despite these positive developments, BigBear.ai reported a net loss of $62 million in the first quarter of 2025 and anticipates remaining unprofitable for the year. Its reliance on U.S. government contracts makes it vulnerable amid budget uncertainties.

Analysts have rated both SoundHound and BigBear.ai as Moderate Buy, indicating similar upside potential. Investors seeking exposure to the growing AI market should consider the risks and rewards associated with these two emerging players.