C3.ai and SoundHound AI are two popular AI experts with flexible business models. But which is better to invest in April 2024? The answer may surprise you.
like Soundhound AI (Thorn 5.77%). The company is an experienced innovator with a unique position in the artificial intelligence (AI) market with a focus on voice control systems and advanced audio analytics.
I'm a fan too C3.ai (A.I. 3.02%). Founded and led by serial innovator Tom Siebel (yes, the namesake innovator behind enterprise software veteran Siebel Systems), C3 develops industry-specific AI solutions for a wide range of target industries. .
But which AI Expert should I buy right now? Both companies have had very unprofitable growth stories so far. How can I choose one or the other?
I respect both companies, but only one seems like a great buy at this point. Feel free to gloss over and move on to my disclosure statement below if you wish. It turns out that I own one of these stocks, but not the other. Wink wink. Nudge, nudge.
How these companies rely on AI
C3.ai offers a suite of enterprise AI software designed to tackle complex business problems, delivering customized AI solutions for specific industries such as energy, manufacturing, and financial services. Their broad approach aims to incorporate AI into various business functions to drive efficiency and predictive analytics.
SoundHound AI specializes in voice-based AI technology. They are focused on developing conversational intelligence to power voice assistants in a variety of markets, from vehicle controls and drive-thru ordering windows to menu systems for home appliances and telephone services. It uses a more advanced voice interpretation system than most rivals, based on multiple layers of analysis powered by deep learning and AI.
competitive environment
SoundHound AI occupies a very special niche in voice AI, including our unique approach to voice analysis. Therefore, we have a unique position with very little direct competition. Alternative song identification experts typically prefer simpler audio analysis approaches based on audio fingerprints of specific recordings. Although this method did not prepare Shazam to explore his broader business opportunities beyond the field of song matching, SoundHound AI has found new uses for audio technology in many other businesses.
C3.ai can counter the flexibility of its audio-specific counterpart in a variety of ways. The company's eponymous homepage lists 10 specific target industries and includes specific case studies in eight areas. The company's machine learning tools help clients analyze oil reserves, manage supply lines, research new vaccines, add generative AI smarts to manufacturing services, and more.
Why you should buy SoundHound AI now
At the end of the day, C3.ai's growth-promoting R&D isn't as effective as SoundHound AI.
C3.ai spends a lot of man-hours (and machine time) developing and fine-tuning solutions specific to each industry. SoundHound AI's base platform can provide a wide range of functionality with little tweaking and expensive packaging of customer-specific solutions.
And while we've already mentioned how tenuous the audio analytics field is, SoundHound AI has room to run. In C3.ai's corner of the AI ​​market, the company is competing with direct competitors such as: IBM (IBM -1.05%), snowflake (snow 3.69%)and sales force (CRM 0.42%). This is a powerful group, all pursuing a very large global market for enterprise AI solutions.
Therefore, SoundHound AI has a much clearer path to long-term growth than C3.ai. The company chose to specialize in a super-special technology years ago, and that decision is now paying dividends in the form of a near-unshakable leadership position.
Finally, the stock is not as expensive as it seems. SoundHound AI stock more than doubles in 2024 thanks to speculative frenzy surrounding modest investment by AI giant Nvidia (NVDA 6.18%). But about half of the speculative price spike has already disappeared, and stocks were significantly undervalued before the pop. Currently, SoundHound AI's market capitalization stands at his $1.4 billion, and the balance of open orders and subscriptions on his books stands at his $661 million.and the backlog doubled In 2023.
And it was done. C3.ai may be a decent investment in the long term, but it faces a highly competitive market and requires significant R&D investment to remain relevant. SoundHound AI is deceptively inexpensive and stands tall in a field with little competition.
That's why I own SoundHound AI and not C3.ai. Even if you end up owning both, I think it's a good idea to consult an audio specialist first.
Anders Bylund has held positions at International Business Machines, Nvidia, and SoundHound AI. The Motley Fool has positions in and recommends Nvidia, Salesforce, and Snowflake. The Motley Fool recommends C3.ai and International Business Machines. The Motley Fool has a disclosure policy.