SoundHound AI leads in revenue growth, while Navitas Semiconductor navigates a challenging shift toward AI infrastructure.
Artificial intelligence continues to be one of the fastest-growing areas in the stock market. Investors looking for exposure to this trend have many options, but two smaller companies often mentioned are SoundHound AI and Navitas Semiconductor. While both operate within the AI ecosystem, they focus on very different parts of the industry.
SoundHound AI works on voice-based artificial intelligence that interacts directly with users. Navitas Semiconductor operates in the background by supplying power-related chips that support data centers and AI infrastructure. Deciding which stock is the better investment depends on growth, financial stability, and valuation.
SoundHound AI Focuses on Voice-Driven Software
SoundHound AI develops voice-powered technology that allows people to interact with devices using natural conversation. Its systems are designed to go beyond basic voice commands and complete actions such as ordering food, booking travel, or managing in-car controls.
Earlier this year, the company introduced Vision AI, a feature that connects voice AI with vehicle cameras. This allows drivers to ask questions about their surroundings. For example, a driver could ask the system to read and translate a sign or call a phone number shown on a billboard. This kind of real-world interaction helps set SoundHound apart from simpler voice assistants.
SoundHound has also expanded through partnerships. In January, it teamed up with Bridgepointe Technologies to help enterprise customers adopt its AI tools. Bridgepointe works with large organizations, including hotel chains and major car manufacturers. This partnership could help SoundHound reach more customers and grow faster.
Strong Revenue Growth but Rising Costs
SoundHound’s revenue growth has been impressive. In the third quarter of 2025, the company reported record revenue of $42 million. That marked a 68 percent increase compared to the same period the year before. The company has grown sales by adding new features and buying smaller companies that specialize in voice AI technology. These acquisitions have helped expand its platform quickly.
However, there is a downside. Operating costs have risen sharply. In the third quarter, expenses jumped to nearly $116 million, more than double the previous year. This level of cost growth cannot continue forever and raises concerns about long-term profitability. Still, management expects revenue to keep growing. SoundHound forecasts full-year 2025 revenue between $165 million and $180 million. That would be almost twice the amount it earned in 2024.
Navitas Semiconductor Shifts Toward AI Infrastructure
Navitas Semiconductor takes a very different approach. The company designs gallium nitride power chips that are more efficient than traditional silicon-based components. These chips allow faster charging, higher power density, and lower energy loss. These features are important for AI data centers, which consume massive amounts of electricity for computing and cooling. Because of this, Navitas believes its technology can play a key role in supporting AI growth.
But Navitas recently made a major change to its business strategy. In the past, a large portion of its revenue came from mobile and consumer electronics sold in China. That market accounted for about 60 percent of its revenue in 2024. In 2025, Navitas decided to move away from that business and focus more on AI customers. As a result, it allowed its China-related sales to decline rather than replacing them immediately.
Revenue Drop and Ongoing Losses
This shift caused a sharp drop in revenue. In the third quarter of 2025, Navitas reported revenue of just $10.1 million, down from $21.7 million the year before. The company is also losing money. Navitas reported a net loss of $19.2 million in the third quarter. Management has started cutting costs, reducing operating expenses to $23.2 million from $37.6 million the previous year.
Despite these efforts, revenue is expected to fall further. Navitas forecasts fourth quarter 2025 sales of about $7 million, far below the same period in 2024. Management believes revenue will start to recover in 2026 as AI-focused customers increase orders. However, that recovery has not yet shown up in financial results.
Comparing Valuation and Risk
Neither SoundHound nor Navitas is currently profitable, so investors often compare them using the forward price to sales ratio. This metric shows how much investors are paying for each dollar of expected future revenue.
SoundHound’s valuation is near the lower end of its range over the past year. Navitas, on the other hand, trades at a much higher multiple, roughly three times higher than SoundHound on a forward sales basis. This suggests that investors are already pricing in a strong recovery for Navitas, even though its revenue is still declining. That creates additional risk if the turnaround takes longer than expected.
Which Stock Looks More Attractive Today?
Buying either stock requires confidence in the company’s future. With SoundHound, investors must believe the company can keep growing revenue while eventually bringing costs under control. With Navitas, investors must trust that its shift toward AI infrastructure will pay off after a difficult transition period.
Given the current numbers, SoundHound appears to offer a better balance of growth and valuation. Its revenue is rising quickly, and its stock trades at a more reasonable level compared to expected sales. Navitas may become a strong AI investment in the future, but the combination of falling revenue and a high valuation makes it riskier right now. A more cautious approach would be to wait for signs of revenue recovery in early 2026.
Final Takeaway
Both SoundHound AI and Navitas Semiconductor provide exposure to the AI industry, but they represent different paths. SoundHound focuses on user-facing software with strong growth momentum. Navitas focuses on hardware infrastructure but is still working through a major business shift.
At this point, SoundHound stands out as the more compelling AI stock due to its rising sales and more reasonable valuation. Navitas may be worth watching, but patience may be the smarter move until its turnaround becomes clearer.
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