In the fast-evolving technology sector, AppLovin Corporation (APP) and SoundHound AI, Inc. (SOUN) stand out as innovators in software applications. AppLovin focuses on mobile app marketing and monetization, while SoundHound specializes in voice AI platforms, both targeting overlapping digital markets. This comparison explores their strategic strengths and growth potential to help you identify which company fits best in your investment portfolio. Let’s dive in and uncover the more compelling opportunity.
Table of contents
Companies Overview
I will begin the comparison between AppLovin Corporation and SoundHound AI, Inc. by providing an overview of these two companies and their main differences.
AppLovin Corporation Overview
AppLovin Corporation is a technology company specializing in software applications that support mobile app developers in marketing and monetizing their apps globally. Its platform offers solutions such as AppDiscovery for marketing, Adjust for analytics and campaign optimization, and MAX for in-app advertising auctions. Headquartered in Palo Alto, California, AppLovin serves advertisers, publishers, and internet platforms with innovative software tools.
SoundHound AI, Inc. Overview
SoundHound AI, Inc. operates within the technology sector, focusing on voice artificial intelligence platforms to enhance conversational experiences for businesses across industries. Its flagship product, the Houndify platform, provides tools like speech recognition, natural language understanding, and text-to-speech to help brands develop custom voice assistants. The company is based in Santa Clara, California, and targets a broad range of commercial clients.
Key similarities and differences
Both AppLovin and SoundHound AI operate in the software application industry within the technology sector, targeting business customers with specialized platforms. While AppLovin concentrates on mobile app marketing and monetization solutions, SoundHound AI focuses on voice AI and conversational interfaces. Each company leverages advanced technologies but addresses distinct market needs—AppLovin in mobile advertising and analytics, SoundHound in voice-driven user engagement.
Income Statement Comparison
The table below presents a side-by-side comparison of the key income statement metrics for AppLovin Corporation and SoundHound AI, Inc. for the fiscal year 2024.
| Metric | AppLovin Corporation | SoundHound AI, Inc. |
|---|---|---|
| Market Cap | 192.5B | 4.7B |
| Revenue | 4.71B | 85M |
| EBITDA | 2.34B | -329M |
| EBIT | 1.89B | -348M |
| Net Income | 1.58B | -351M |
| EPS | 4.68 | -1.04 |
| Fiscal Year | 2024 | 2024 |
Income Statement Interpretations
AppLovin Corporation
AppLovin’s revenue showed strong growth from 2020 to 2024, increasing from $1.45B to $4.71B, with net income turning markedly positive, reaching $1.58B in 2024 from a loss in earlier years. Margins improved significantly, with a gross margin of 75.22% and net margin at 33.55% in 2024. The latest year saw exceptional growth in revenue (+43%) and net income (+209%), reflecting robust operational execution.
SoundHound AI, Inc.
SoundHound’s revenue increased substantially from $13M in 2020 to $85M in 2024, but it remained unprofitable with net losses widening to $351M in 2024. Gross margin stayed favorable at 48.86%, yet the EBIT and net margins were deeply negative, reflecting high operating expenses. Despite revenue growth of 85% in the last year, the net margin and EPS deteriorated, indicating ongoing operational challenges.
Which one has the stronger fundamentals?
AppLovin demonstrates stronger fundamentals with consistently positive and improving profitability, high and expanding margins, and significant net income growth. In contrast, SoundHound shows rapid revenue growth but sustained and increasing losses, with unfavorable margins and profitability metrics. The overall income statement evaluation favors AppLovin’s financial health over SoundHound’s current earnings position.
Financial Ratios Comparison
This table presents the key financial ratios for AppLovin Corporation (APP) and SoundHound AI, Inc. (SOUN) based on the most recent full fiscal year data available for 2024.
| Ratios | AppLovin Corporation (APP) | SoundHound AI, Inc. (SOUN) |
|---|---|---|
| ROE | 144.96% | -191.99% |
| ROIC | 38.70% | -68.13% |
| P/E | 69.06 | -19.15 |
| P/B | 100.11 | 36.76 |
| Current Ratio | 2.19 | 3.77 |
| Quick Ratio | 2.19 | 3.77 |
| D/E (Debt-to-Equity) | 3.26 | 0.02 |
| Debt-to-Assets | 60.59% | 0.79% |
| Interest Coverage | 5.89 | -28.05 |
| Asset Turnover | 0.80 | 0.15 |
| Fixed Asset Turnover | 23.71 | 14.28 |
| Payout Ratio | 0 | 0 |
| Dividend Yield | 0 | 0 |
Interpretation of the Ratios
AppLovin Corporation
AppLovin shows a mixed ratio profile with strong profitability indicators like a 33.55% net margin, 144.96% return on equity, and 38.7% return on invested capital, signaling operational efficiency. However, its high debt levels (debt-to-equity 3.26, debt-to-assets 60.59%) and expensive valuation multiples (PE 69.06, PB 100.11) raise concerns. It does not pay dividends, likely prioritizing growth and reinvestment.
SoundHound AI, Inc.
SoundHound’s ratios reveal significant challenges, including a negative net margin of -414.06%, ROE of -191.99%, and weak asset turnover of 0.15, reflecting operational difficulties. The company maintains minimal debt (debt-to-equity 0.02, debt-to-assets 0.79%) but suffers poor interest coverage (-28.58). No dividends are paid, consistent with its investment focus amid negative earnings and growth phase.
Which one has the best ratios?
AppLovin’s ratios are overall more favorable, exhibiting strong profitability and operational returns despite elevated leverage and valuation concerns. In contrast, SoundHound’s metrics indicate weaker financial health and profitability with a predominantly unfavorable ratio profile. Thus, AppLovin demonstrates a comparatively better financial position based on the available ratios.
Strategic Positioning
This section compares the strategic positioning of AppLovin Corporation and SoundHound AI, Inc., including market position, key segments, and exposure to technological disruption:
AppLovin Corporation
- Large market cap of $192.5B, faces competitive pressure in mobile app marketing and monetization sectors.
- Key segments: advertising software, app discovery, analytics, and in-app bidding driving growth and monetization.
- Exposure to technological disruption linked to evolving mobile advertising and analytics technologies.
SoundHound AI, Inc.
- Smaller market cap of $4.7B, operates in voice AI, with competitive pressure in conversational AI platforms.
- Key segments: hosted services, licensing, and professional services focused on voice AI platforms for various industries.
- Exposure to disruption from rapid advances in AI-driven voice recognition and natural language understanding.
AppLovin Corporation vs SoundHound AI, Inc. Positioning
AppLovin has a diversified business model spanning advertising and app analytics, leveraging scale and multiple revenue streams. SoundHound is more concentrated on voice AI services, with narrower but specialized offerings. AppLovin’s scale provides breadth, while SoundHound focuses on innovative AI voice technology.
Which has the best competitive advantage?
AppLovin holds a very favorable moat with growing ROIC well above its WACC, indicating durable competitive advantage and value creation. SoundHound shows slightly unfavorable moat status, shedding value despite improving profitability, indicating weaker competitive advantage.
Stock Comparison
The past year showed significant bullish trends for both AppLovin Corporation and SoundHound AI, Inc., with notable price surges followed by recent declines indicating shifts in trading momentum.
Trend Analysis
AppLovin Corporation’s stock displayed a strong bullish trend with an 893.1% price increase over the past 12 months, though the trend shows deceleration. Recent weeks revealed a 10.57% price decline amid elevated volatility.
SoundHound AI, Inc. also experienced a bullish trend with a 188.39% gain over one year, accompanied by deceleration. The recent period saw a sharper 35.84% drop, reflecting a negative slope in price movement.
Comparing both, AppLovin outperformed SoundHound significantly in market performance over the past year, despite both stocks facing recent downward corrections.
Target Prices
The current analyst consensus offers a clear outlook on the price potential for AppLovin Corporation and SoundHound AI, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| AppLovin Corporation | 860 | 630 | 756.33 |
| SoundHound AI, Inc. | 15 | 11 | 13.33 |
Analysts expect AppLovin’s stock to appreciate significantly above its current price of 569.13 USD, while SoundHound shows moderate upside potential from its current 11.28 USD price level.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for AppLovin Corporation and SoundHound AI, Inc.:
Rating Comparison
AppLovin Corporation Rating
- Rating: B, considered very favorable overall.
- Discounted Cash Flow Score: 3, moderate valuation metric.
- ROE Score: 5, very favorable efficiency in equity use.
- ROA Score: 5, very favorable asset utilization.
- Debt To Equity Score: 1, very unfavorable financial risk.
- Overall Score: 3, moderate financial standing.
SoundHound AI, Inc. Rating
- Rating: C-, also noted as very favorable overall.
- Discounted Cash Flow Score: 1, very unfavorable.
- ROE Score: 1, very unfavorable equity returns.
- ROA Score: 1, very unfavorable asset returns.
- Debt To Equity Score: 4, favorable balance sheet.
- Overall Score: 1, very unfavorable financials.
Which one is the best rated?
Based on the provided data, AppLovin Corporation holds a superior overall rating (B) with stronger ROE and ROA scores, despite higher financial risk, compared to SoundHound AI’s weaker financial scores and lower overall rating (C-).
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for AppLovin Corporation and SoundHound AI, Inc.:
AppLovin Corporation Scores
- Altman Z-Score: 30.7, indicating a safe zone with very low bankruptcy risk.
- Piotroski Score: 7, classified as strong financial health.
SoundHound AI, Inc. Scores
- Altman Z-Score: 6.62, also in the safe zone but significantly lower than AppLovin.
- Piotroski Score: 3, considered very weak financial strength.
Which company has the best scores?
AppLovin Corporation shows stronger financial stability with a much higher Altman Z-Score and a strong Piotroski Score. SoundHound AI, while in the safe zone for bankruptcy risk, has a substantially weaker Piotroski Score, indicating lower financial strength.
Grades Comparison
The grades of AppLovin Corporation and SoundHound AI, Inc. from established grading companies are as follows:
AppLovin Corporation Grades
This table summarizes recent grades and rating actions from reputable grading firms for AppLovin Corporation.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Morgan Stanley | Maintain | Overweight | 2026-01-13 |
| Wells Fargo | Maintain | Overweight | 2026-01-08 |
| Jefferies | Maintain | Buy | 2025-12-11 |
| Benchmark | Maintain | Buy | 2025-12-11 |
| Citigroup | Maintain | Buy | 2025-11-12 |
| Wells Fargo | Maintain | Overweight | 2025-11-07 |
| Goldman Sachs | Maintain | Neutral | 2025-11-07 |
| JP Morgan | Maintain | Neutral | 2025-11-06 |
| Wedbush | Maintain | Outperform | 2025-11-06 |
| Piper Sandler | Maintain | Overweight | 2025-11-06 |
AppLovin’s grades predominantly reflect positive views, with many Buy and Overweight ratings, and no downgrades reported.
SoundHound AI, Inc. Grades
Below is an overview of recent grades and rating actions from recognized grading companies for SoundHound AI, Inc.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Piper Sandler | Maintain | Neutral | 2026-01-05 |
| Cantor Fitzgerald | Upgrade | Overweight | 2025-12-12 |
| DA Davidson | Maintain | Buy | 2025-11-18 |
| Piper Sandler | Maintain | Neutral | 2025-11-07 |
| HC Wainwright & Co. | Maintain | Buy | 2025-10-16 |
| HC Wainwright & Co. | Maintain | Buy | 2025-09-17 |
| Wedbush | Maintain | Outperform | 2025-09-11 |
| DA Davidson | Maintain | Buy | 2025-09-10 |
| Ladenburg Thalmann | Upgrade | Buy | 2025-08-11 |
| Wedbush | Maintain | Outperform | 2025-08-08 |
SoundHound AI’s ratings show a generally positive outlook, with several Buy and Outperform grades and some upgrades during the period.
Which company has the best grades?
Both companies have received predominantly Buy and positive ratings, but AppLovin Corporation shows a higher volume of Buy and Overweight grades from large institutions. This suggests potentially stronger analyst confidence, which may influence investor sentiment and portfolio decisions.
Strengths and Weaknesses
Below is a comparison of key strengths and weaknesses for AppLovin Corporation (APP) and SoundHound AI, Inc. (SOUN) based on their recent financial and operational data.
| Criterion | AppLovin Corporation (APP) | SoundHound AI, Inc. (SOUN) |
|---|---|---|
| Diversification | Broad revenue base with strong segments in Advertising (3.22B) and Apps (1.49B) | Narrower revenue streams mainly from Hosted Services (57M), Licensing (18M), and Professional Services (9M) |
| Profitability | High net margin (33.55%), ROIC (38.7%), and ROE (144.96%) indicating strong profitability | Negative net margin (-414%), ROIC (-68.13%), and ROE (-192%) reflect ongoing losses |
| Innovation | Consistent investment in software platforms and apps; growing ROIC trend suggests innovation success | Improving ROIC trend, but still value-destroying; innovation efforts visible but not yet profitable |
| Global presence | Significant scale with large advertising and app markets | Smaller scale with limited global reach and niche AI voice technology focus |
| Market Share | Strong market position in mobile advertising and app ecosystems | Emerging player in AI voice and conversational intelligence with limited market share |
AppLovin demonstrates clear strengths in profitability, diversification, and market presence with a durable competitive advantage. SoundHound shows potential through innovation and improving ROIC but currently struggles with profitability and scale, making it a higher-risk investment.
Risk Analysis
Below is a comparative risk table for AppLovin Corporation (APP) and SoundHound AI, Inc. (SOUN) based on the latest 2024 data and 2026 context.
| Metric | AppLovin Corporation (APP) | SoundHound AI, Inc. (SOUN) |
|---|---|---|
| Market Risk | High beta 2.5 indicates volatility; stock price dropped 6.2% recently | Very high beta 2.9; volatile with wide price range |
| Debt level | High debt-to-equity (3.26) and 60.6% debt to assets; interest coverage 5.95 (adequate) | Very low debt (0.02) and 0.79% debt to assets; negative interest coverage (-28.58) due to losses |
| Regulatory Risk | Moderate, U.S.-based tech sector under scrutiny for data privacy | Moderate, voice AI sector faces evolving regulations globally |
| Operational Risk | Dependence on mobile app ecosystem; competitive ad tech market | Early-stage AI tech with high R&D costs; scaling challenges |
| Environmental Risk | Low direct impact; typical tech company footprint | Low direct impact; AI platform with minimal physical footprint |
| Geopolitical Risk | U.S. headquartered but global operations may face trade tensions | U.S. based; international customers but limited exposure |
Synthesis: Market risk is significant for both due to high betas, with SoundHound showing more volatility. AppLovin’s high debt levels pose financial risk despite strong profitability, while SoundHound’s negative margins and weak operational metrics increase bankruptcy risk. Regulatory changes in AI and data privacy remain important to monitor. AppLovin is stronger operationally but more leveraged; SoundHound is less indebted but financially fragile.
Which Stock to Choose?
AppLovin Corporation (APP) shows a strong income evolution with a 43% revenue growth in 2024 and highly favorable profitability ratios including a 33.55% net margin and 144.96% ROE. Despite elevated debt levels and some unfavorable valuation metrics, its overall rating is very favorable, supported by a very favorable economic moat and strong financial health scores.
SoundHound AI, Inc. (SOUN) exhibits a mixed income profile with 85% revenue growth but significantly negative profitability metrics, including a -414% net margin and negative ROE. While its debt ratios are favorable, its overall financial ratios and rating are unfavorable, reflecting value destruction despite improving profitability trends and a safe zone Altman Z-score.
For investors prioritizing stability and strong profitability, APP could appear more favorable given its solid income statement, robust financial ratios, and durable competitive advantage. Conversely, SOUN might appeal to those with a higher risk tolerance seeking growth potential amid financial challenges, as indicated by its improving but still unfavorable metrics and weaker rating.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of AppLovin Corporation and SoundHound AI, Inc. to enhance your investment decisions:
