<div id="readability-page-1"><p>Artificial intelligence (AI) is the hottest investment theme on the planet right now. And for good reason. AI could be revolutionary for everything from business to our daily lives. For example, AI can make cars safer or save pharmaceutical companies time in the development of drugs. And these transformations, as they improve efficiency and products and services, could lead to significant earnings growth for companies using or developing AI tools.</p> <p>As a result, investors who get in early on these future AI leaders also may score a big win -- possibly in the near term and most importantly down the road. The key is picking the right AI stocks today to offer yourself the best chance of big returns over time.</p> <p>Two AI stocks that already have soared more than 200% this year look like they still could offer upside over the long term because both are in the early days of their growth story. I'm talking about <strong>SoundHound AI</strong> <span>(SOUN<span> 18.15%</span>)</span> and <strong>Palantir Technologies</strong> <span>(PLTR<span> 0.47%</span>)</span>. But if you could only buy one, which makes the best to get into today? Let's find out.</p> <div><p><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy83OTkzOTcvZ2V0dHlpbWFnZXMtOTM2Mjg0MDA0LmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="467" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy83OTkzOTcvZ2V0dHlpbWFnZXMtOTM2Mjg0MDA0LmpwZyZ3PTcwMA"/></p><p>Image source: Getty Images.</p> </div> <h2>The case for SoundHound</h2> <p>SoundHound is a specialist in voice AI such as a voice AI assistant you may find in a car or at a restaurant to take your drive-thru order. Though many companies operate in this field, SoundHound's technology -- protected by hundreds of patents -- sets it apart. Unlike the traditional method of understanding that involves translating voice to text and then to meaning, SoundHound immediately translates speech to meaning. This results in speed and improved accuracy.</p>  <p>The voice technology company has seen revenue soar in recent times; it climbed 89% in the latest quarter and prompted SoundHound to increase its outlook. Earlier, the company said annual 2024 revenue would surpass $80 million, and now SoundHound says it will be in the range of $82 million to $85 million. Importantly, the company has made progress on diversifying its revenue sources. For example, five sectors now each contribute 5% to 25% to revenue compared with autos contributing 90% only a year ago.</p> <p>SoundHound's total addressable market tops $140 billion, offering this company plenty of room for new customer acquisition and revenue growth, especially as it expands across industries such as financial services, retail, and healthcare. So, it's fair to say that, though growth has been impressive so far, this may be just the beginning.</p> <h2>The case for Palantir</h2> <p>Throughout most of Palantir's 20-year history, it was generally associated with government contracts. Governments used Palantir's software platform to aggregate their data and make better use of it. But in recent times, thanks to the AI boom and Palantir's introduction of its Artificial Intelligence Platform (AIP) last year, demand from commercial customers has taken off, and that's helped Palantir's growth and share price to soar.</p>  <p>AIP helps both governments and commercial customers turn their data into smart decisions and better projects, and Palantir has called demand for this system &#34;unrelenting.&#34; Today, Palantir is posting double-digit growth from both its government and commercial businesses, and in the most recent quarter, it reported its biggest profit ever.</p> <p>The company's revenue growth rate has advanced over the past six quarters from 13% at the start of that period to 30% in the most recent quarter. Another example of Palantir's rapid growth: The company had only 14 U.S. commercial customers four years ago and today has nearly 300.</p> <p>Finally, to further illustrate the strength of this tech company, the S&amp;P 500 recently invited it to join, showing that it's one of the companies powering today's economy.</p> <h2>Should you buy SoundHound or Palantir?</h2> <p>As mentioned, both of these stocks have soared this year, leaving valuations high. SoundHound isn't yet profitable, so we can look at its price-to-sales ratio -- and here it trades for 34 times forward sales estimates. Palantir is profitable, so we can consider its forward price-to-earnings ratio -- and right now the stock trades for more than 170 times forward earnings estimates.</p> <p>Since both companies are in the early days of their AI growth stories, these measures looking at near-term sales and earnings, may not present the full long-term story. So, if the company as a whole looks solid and earnings prospects seem promising, it's worth considering these stocks in spite of their current valuations.</p> <p>Which one makes the best choice now? I would go for Palantir since it's already profitable and at the same time still has plenty of room for revenue growth ahead. The company just launched AIP a year ago, commercial client growth is solid, and there's so much opportunity to make gains in this commercial market in the coming years considering the number of commercial customers Palantir has today. So, both of these stocks could win over time, but Palantir makes the better buy right now.</p>                                                                                             </div>

PLTR

<p>The article compares two AI stocks, SoundHound and Palantir, both of which have seen significant growth this year. SoundHound specializes in voice AI and has diversified its revenue sources, projecting substantial future growth. Palantir, traditionally focused on government contracts, has expanded into commercial markets with its AI Platform, showing strong revenue growth and profitability. While both stocks are highly valued, the author recommends Palantir for its profitability and growth potential in the commercial sector.</p>

- Artificial intelligence (AI) is currently a leading investment theme due to its potential to revolutionize various industries and drive significant earnings growth.  
- Two notable AI stocks, SoundHound AI and Palantir Technologies, have both seen substantial growth, with SoundHound focusing on voice AI and Palantir expanding its commercial customer base through its Artificial Intelligence Platform.  
- While both companies show promise, Palantir is recommended as the better investment due to its profitability and strong growth prospects in the commercial sector.

Better Artificial Intelligence Stock: SoundHound vs. Palantir