In the rapidly evolving technology sector, Snowflake Inc. and SoundHound AI, Inc. stand out as innovators in software applications, each targeting data and AI-driven solutions. Snowflake focuses on cloud-based data platforms, enabling businesses to unify and analyze massive datasets, while SoundHound AI specializes in voice AI technologies that enhance conversational experiences. This article explores their strengths and market positions to help you decide which company presents the most compelling investment opportunity in 2026.
Table of contents
Companies Overview
I will begin the comparison between Snowflake Inc. and SoundHound AI, Inc. by providing an overview of these two companies and their main differences.
Snowflake Inc. Overview
Snowflake Inc. is a technology company operating in the software application industry, providing a cloud-based data platform primarily in the US and internationally. Its Data Cloud platform consolidates data to enable business insights, data-driven applications, and data sharing. Founded in 2012 and headquartered in Bozeman, Montana, Snowflake serves a broad range of industries and has a market cap of approximately 70.4B USD.
SoundHound AI, Inc. Overview
SoundHound AI, Inc. develops voice AI platforms designed to create conversational experiences for businesses across industries. Its flagship Houndify platform offers tools like speech recognition, natural language understanding, and embedded voice solutions. Founded more recently and based in Santa Clara, California, SoundHound operates in the same software application sector with a market cap near 4.7B USD and a focus on voice AI technology.
Key similarities and differences
Both Snowflake and SoundHound operate within the technology sector under software applications, aiming to enhance business capabilities through advanced platforms. However, Snowflake centers on cloud-based data management and analytics, while SoundHound specializes in voice AI and conversational tools. Their market caps and employee bases differ substantially, reflecting distinct scale and maturity stages in their respective niches.
Income Statement Comparison
The table below presents a side-by-side comparison of key income statement metrics for Snowflake Inc. and SoundHound AI, Inc. for their most recent fiscal years.
| Metric | Snowflake Inc. (SNOW) | SoundHound AI, Inc. (SOUN) |
|---|---|---|
| Market Cap | 70.4B | 4.7B |
| Revenue | 3.63B | 85M |
| EBITDA | -1.10B | -329M |
| EBIT | -1.28B | -348M |
| Net Income | -1.29B | -351M |
| EPS | -3.86 | -1.04 |
| Fiscal Year | 2025 | 2024 |
Income Statement Interpretations
Snowflake Inc.
Snowflake Inc. has demonstrated strong revenue growth from 2021 to 2025, increasing from $592M to $3.63B, a favorable trend supported by a gross margin of 66.5%. However, net income remains negative, with a widening loss reaching -$1.29B in 2025. Margins show mixed signals: while gross margins remain robust, EBIT and net margins are unfavorable and have deteriorated in the latest year, indicating rising costs and operational challenges. The 2025 fiscal year saw a significant 29.2% revenue growth but a 51% decline in EBIT, highlighting margin pressure despite top-line expansion.
SoundHound AI, Inc.
SoundHound AI’s revenue grew substantially from $13M in 2020 to $85M in 2024, supported by a gross margin near 49%. Despite this growth, the company posted sizeable net losses reaching -$351M in 2024, with highly unfavorable EBIT and net margins exceeding -400%. Operating expenses grew faster than revenue, worsening profitability. The latest year showed an 84.6% revenue increase but a sharp 409% decline in EBIT, reflecting heavy investment or inefficiencies impacting bottom-line results.
Which one has the stronger fundamentals?
Snowflake exhibits a more balanced income statement with strong revenue and gross margin growth, though persistent net losses and declining EBIT highlight profitability challenges. SoundHound shows rapid revenue expansion but suffers from very high losses and unfavorable margins, compounded by high interest expenses. Overall, Snowflake’s fundamentals appear more stable and favorable in terms of margin quality and cost control, whereas SoundHound’s financials suggest greater risk due to its negative margins and expense growth.
Financial Ratios Comparison
Below is a comparative table presenting the most recent key financial ratios for Snowflake Inc. (SNOW) and SoundHound AI, Inc. (SOUN) based on their fiscal year 2025 and 2024 data respectively.
| Ratios | Snowflake Inc. (2025) | SoundHound AI, Inc. (2024) |
|---|---|---|
| ROE | -42.9% | -191.9% |
| ROIC | -25.2% | -68.1% |
| P/E | -47.0 | -19.1 |
| P/B | 20.1 | 36.8 |
| Current Ratio | 1.75 | 3.77 |
| Quick Ratio | 1.75 | 3.77 |
| D/E (Debt-to-Equity) | 0.90 | 0.02 |
| Debt-to-Assets | 29.7% | 0.8% |
| Interest Coverage | -528 | -28.1 |
| Asset Turnover | 0.40 | 0.15 |
| Fixed Asset Turnover | 5.53 | 14.28 |
| Payout Ratio | 0 | 0 |
| Dividend Yield | 0 | 0 |
Interpretation of the Ratios
Snowflake Inc.
Snowflake’s ratios are mixed, with several unfavorable indicators including negative net margin (-35.45%), return on equity (-42.86%), and return on invested capital (-25.24%). However, liquidity ratios like current and quick ratio at 1.75 are favorable, reflecting decent short-term financial health. The company does not pay dividends, consistent with its reinvestment focus in a competitive cloud software market.
SoundHound AI, Inc.
SoundHound’s financial ratios reveal significant weaknesses, including an extremely negative net margin (-414.06%) and return on equity (-191.99%), highlighting operational challenges. The current ratio of 3.77 shows strong liquidity but is marked unfavorable in this context, possibly due to asset structure. Like Snowflake, SoundHound pays no dividends, likely prioritizing growth and R&D over shareholder payouts.
Which one has the best ratios?
Comparing both, Snowflake exhibits a slightly more balanced ratio profile with some favorable liquidity and turnover metrics despite profitability concerns. SoundHound faces more pronounced financial difficulties with a higher proportion of unfavorable ratios. Overall, Snowflake’s ratios appear less unfavorable, suggesting relatively better financial stability between the two.
Strategic Positioning
This section compares the strategic positioning of Snowflake Inc. and SoundHound AI, Inc. regarding market position, key segments, and exposure to technological disruption:
Snowflake Inc.
- Leading cloud-based data platform with strong market cap and moderate beta.
- Focused on cloud data platform products driving most revenue; professional services secondary.
- Positioned in cloud data management, limited data on disruption exposure.
SoundHound AI, Inc.
- Smaller market cap with higher beta, operating in voice AI niche.
- Revenue split among hosted services, licensing, and professional services.
- Focus on independent voice AI platform, exposed to rapid AI advances.
Snowflake Inc. vs SoundHound AI, Inc. Positioning
Snowflake pursues a concentrated cloud data platform strategy with large-scale product revenue, while SoundHound targets diversified voice AI services. Snowflake benefits from scale but faces competitive cloud pressure; SoundHound’s diversified model may capture emerging AI trends but with smaller scale.
Which has the best competitive advantage?
Both companies are currently shedding value with ROIC below WACC. Snowflake shows declining profitability (Very Unfavorable moat), whereas SoundHound exhibits improving profitability (Slightly Unfavorable moat), indicating a marginally stronger competitive position for SoundHound.
Stock Comparison
The stock price movements over the past year reveal a clear divergence between Snowflake Inc. and SoundHound AI, Inc., with Snowflake experiencing a bearish trend marked by significant volatility, while SoundHound AI shows a strong bullish trend despite recent declines.
Trend Analysis
Snowflake Inc. (SNOW) recorded an 8.27% price decline over the past 12 months, indicating a bearish trend with deceleration. The stock showed high volatility with a standard deviation of 42.6 and traded between $108.56 and $274.88.
SoundHound AI, Inc. (SOUN) posted a 183.16% price increase over the same period, reflecting a bullish trend with deceleration. Volatility was low at a 4.66 standard deviation, with prices ranging from $3.55 to $23.95.
Comparing both stocks, SoundHound AI delivered substantially higher market performance over the past year, while Snowflake’s shares faced downward pressure and greater volatility.
Target Prices
The current analyst consensus presents a cautiously optimistic outlook for Snowflake Inc. and SoundHound AI, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Snowflake Inc. | 325 | 237 | 281.86 |
| SoundHound AI, Inc. | 15 | 11 | 13.33 |
Analysts expect Snowflake’s stock to appreciate significantly, with a consensus target about 34% above its current price of $210.38. SoundHound AI’s target consensus is also above its current $11.10 price, suggesting moderate upside potential.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Snowflake Inc. and SoundHound AI, Inc.:
Rating Comparison
Snowflake Inc. Rating
- Rating: C-, considered very favorable by analysts
- Discounted Cash Flow Score: 3, moderate valuation
- ROE Score: 1, very unfavorable profitability
- ROA Score: 1, very unfavorable asset utilization
- Debt To Equity Score: 1, very unfavorable leverage
- Overall Score: 1, very unfavorable overall rating
SoundHound AI, Inc. Rating
- Rating: C-, considered very favorable by analysts
- Discounted Cash Flow Score: 1, very unfavorable valuation
- ROE Score: 1, very unfavorable profitability
- ROA Score: 1, very unfavorable asset utilization
- Debt To Equity Score: 4, favorable leverage
- Overall Score: 1, very unfavorable overall rating
Which one is the best rated?
Both Snowflake and SoundHound share the same overall rating of C- and an overall score of 1, indicating very unfavorable financial health. Snowflake scores moderately better on discounted cash flow, while SoundHound has a stronger debt-to-equity score.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for Snowflake Inc. and SoundHound AI, Inc.:
SNOW Scores
- Altman Z-Score: 5.36, indicating a safe zone with low bankruptcy risk.
- Piotroski Score: 4, assessed as average financial strength.
SOUN Scores
- Altman Z-Score: 6.62, indicating a safe zone with low bankruptcy risk.
- Piotroski Score: 3, assessed as very weak financial strength.
Which company has the best scores?
Both companies are in the safe zone for Altman Z-Score, with SOUN scoring higher at 6.62 versus SNOW’s 5.36. However, SNOW has a better Piotroski Score of 4 compared to SOUN’s 3, indicating stronger financial health by that measure.
Grades Comparison
Here is a comparison of recent grades from reputable grading companies for Snowflake Inc. and SoundHound AI, Inc.:
Snowflake Inc. Grades
Below is a summary of Snowflake Inc.’s latest grades from major financial institutions:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Downgrade | Equal Weight | 2026-01-12 |
| Argus Research | Upgrade | Buy | 2026-01-08 |
| Citigroup | Maintain | Buy | 2025-12-08 |
| Wells Fargo | Maintain | Overweight | 2025-12-04 |
| Keybanc | Maintain | Overweight | 2025-12-04 |
| Piper Sandler | Maintain | Overweight | 2025-12-04 |
| Morgan Stanley | Maintain | Overweight | 2025-12-04 |
| Wedbush | Maintain | Outperform | 2025-12-04 |
| Deutsche Bank | Maintain | Buy | 2025-12-04 |
| Cantor Fitzgerald | Maintain | Overweight | 2025-12-04 |
Snowflake’s grades mostly reflect a strong buy and overweight consensus with a recent downgrade to equal weight by Barclays.
SoundHound AI, Inc. Grades
Below is a summary of SoundHound AI, Inc.’s recent grades from recognized analysts:
| 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 | 2025-08-08 |
| DA Davidson | Maintain | Buy | 2025-09-10 |
| Ladenburg Thalmann | Upgrade | Buy | 2025-08-11 |
| Wedbush | Maintain | Outperform | 2025-08-08 |
SoundHound AI’s grades indicate a mix of buy, neutral, and outperform ratings, with recent upgrades to overweight and buy.
Which company has the best grades?
Snowflake Inc. displays a stronger consensus with a higher number of buy and overweight ratings, suggesting greater analyst confidence compared to SoundHound AI, Inc. This may imply a more robust outlook perceived by market professionals for Snowflake, potentially impacting investor sentiment and portfolio positioning.
Strengths and Weaknesses
Below is a comparison of key strengths and weaknesses for Snowflake Inc. (SNOW) and SoundHound AI, Inc. (SOUN) based on the most recent financial and operational data.
| Criterion | Snowflake Inc. (SNOW) | SoundHound AI, Inc. (SOUN) |
|---|---|---|
| Diversification | Moderate: Revenue mostly from Product (3.46B USD in 2025) with some Professional Services | Limited: Revenue concentrated in Hosted Services (57M USD), Licensing, and Professional Services |
| Profitability | Unfavorable: Negative net margin (-35.45%), ROIC -25.24%, value destroying with declining profitability | Unfavorable: Very negative net margin (-414%), ROIC -68.13%, but improving ROIC trend |
| Innovation | Strong product growth with increasing revenue (from 554M USD in 2021 to 3.46B USD in 2025) | Growing innovation potential with increasing Hosted Services revenue (18M USD in 2023 to 57M USD in 2024) |
| Global presence | Strong: Large-scale cloud data platform with international customers | Smaller scale, niche AI voice tech, less global reach |
| Market Share | Significant in cloud data warehousing sector but facing profitability challenges | Niche market with potential but limited current market share and scale |
Key takeaways: Snowflake shows strong revenue growth and innovation but is currently unprofitable and destroying value, raising caution. SoundHound has a smaller footprint and weak profitability but shows improving capital efficiency and innovation momentum. Both require careful risk management before investing.
Risk Analysis
Below is a risk comparison table between Snowflake Inc. (SNOW) and SoundHound AI, Inc. (SOUN) based on the most recent available year data:
| Metric | Snowflake Inc. (SNOW) | SoundHound AI, Inc. (SOUN) |
|---|---|---|
| Market Risk | Beta 1.14, moderate volatility | Beta 2.88, high volatility |
| Debt level | Debt-to-Equity 0.9 (neutral) | Debt-to-Equity 0.02 (favorable) |
| Regulatory Risk | Moderate, tech sector focus | Moderate, AI and voice tech focus |
| Operational Risk | Scale with 7,800+ employees | Smaller scale, 840+ employees |
| Environmental Risk | Low, software industry | Low, software/AI industry |
| Geopolitical Risk | US-based, global customers | US-based, global customers |
The most likely and impactful risks are market volatility and operational scale. SoundHound’s higher beta (2.88) suggests more price swings, increasing market risk compared to Snowflake. Snowflake’s larger size and more established platform reduce operational risk but face margin pressures and unfavorable profitability. SoundHound’s very weak profitability and financial health scores heighten its investment risk despite low debt. Both companies operate in sectors with regulatory scrutiny, but no immediate environmental or geopolitical risks stand out. Caution is advised, especially with SoundHound’s financial instability.
Which Stock to Choose?
Snowflake Inc. (SNOW) shows a strong revenue growth of 29.21% in 2025 and a favorable gross margin of 66.5%, but suffers from negative profitability and declining returns on equity and invested capital. Its debt levels are moderate, with a current ratio of 1.75 and a slightly unfavorable overall financial ratio profile. Despite a very unfavorable moat due to value destruction, SNOW’s Altman Z-Score signals financial stability.
SoundHound AI, Inc. (SOUN) experienced higher revenue growth at 84.62% in 2024 but struggles with severe profitability issues, including a net margin of -414.06% and unfavorable returns on equity and capital. Its debt ratio is low and liquidity strong, reflected in a high current ratio of 3.77, yet financial ratios remain largely unfavorable. The company shows a slightly unfavorable moat with improving profitability and a safe Altman Z-Score.
Investors seeking growth might find SOUN’s accelerating revenue and improving profitability trends appealing, while those prioritizing financial stability may see SNOW’s higher market cap and safer credit indicators as more suitable. Both companies present significant risks with unfavorable profitability and value destruction signals, making cautious interpretation of their financial health essential.
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 Snowflake Inc. and SoundHound AI, Inc. to enhance your investment decisions:
