MSFT vs. SOUN: Which AI Stock Is the Smarter Play for 2025?

Tech investors face a classic dilemma: bet on the established titan or the emerging disruptor? Microsoft's AI dominance clashes with SoundHound's niche potential—and the stakes have never been higher.

Microsoft's Azure AI ecosystem keeps expanding while SoundHound's voice AI tech gains traction in automotive and restaurant sectors. Both stocks show promise, but which delivers better risk-adjusted returns?

Wall Street's obsession with 'the next big thing' often overlooks cash flow stability. Meanwhile, retail investors chase narratives while institutions accumulate positions quietly.

The verdict? Microsoft offers fortress-like stability with AI upside, while SoundHound provides explosive growth potential—if you can stomach the volatility. Choose wisely: in the AI arms race, not every company becomes Nvidia.

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Using the TipRanks Stocks Comparison tool, we have placed SOUN and MSFT against each other, comparing them on multiple parameters. Below is the screenshot.

SoundHound AI (NASDAQ:SOUN)

SoundHound AI focuses on voice recognition and natural language processing, providing AI-driven solutions across multiple industries. The company is benefiting from strong demand for its voice AI technology and an expanding product lineup.

Notably, the company recently reported its strongest quarter yet in Q2, with revenue soaring 217% year-over-year to $42.7 million and a net loss narrowing to $0.03 per share. SoundHound also raised its full-year guidance to $160–$178 million, slightly above prior estimates. While SoundHound is not yet profitable, its rapid revenue growth and improving outlook suggest strong long-term potential. However, ongoing losses and stiff competition make SOUN a high-risk, high-reward stock for investors in the NEAR term.

Despite the recent surge following its impressive Q2 results, SOUN stock remains down roughly 34% year-to-date, highlighting both the volatility and the growth opportunity for investors.

Is SoundHound Stock a Good Buy?

Overall, analysts have a Moderate Buy consensus rating on SoundHound stock based on five Buys and two Holds assigned over the last three months. The average SOUN stock price target of $15.33 implies a 6.46% upside potential.

Microsoft (NASDAQ:MSFT)

While SoundHound offers rapid growth and niche expertise in voice AI, Microsoft brings the scale, resources, and broad AI portfolio of a tech giant.

Microsoft stock could offer a compelling bullish case for investors, driven by its dominant position in cloud computing, AI, and enterprise software. The company’s recent AI integrations across products like Azure and Office 365 have strengthened its growth outlook, while strong recurring revenue and cash FLOW provide a stable foundation. In Q4 FY25, Microsoft’s revenue reached $76.4 billion, surpassing analysts’ estimates of $73.8 billion. Intelligent Cloud revenue jumped 26% to $29.9 billion, fueled by a 39% increase in Azure and other cloud services.

Turning to Wall Street, four-star-rated analyst Tyler Radke at Citi has the highest price target of $680 for MSFT stock, implying a potential upside of 34% from current levels. Radke calls Microsoft “top pick in software.” He highlighted that the company’s strong pricing power, along with gains in cloud and AI market share, could drive outsized returns for investors.

Is Microsoft a Buy or Sell?

According to TipRanks, MSFT stock has received a Strong Buy consensus rating, with 33 Buys and one Hold assigned in the last three months. The average Microsoft stock price target is $626.8, suggesting a potential upside of 24% from the current level.

Conclusion

While SoundHound offers high-growth potential in niche voice AI, Microsoft provides scale, stability, and diversified AI exposure. Investors should weigh the high-risk, high-reward upside of SOUN against MSFT’s strong long-term growth potential and position their portfolios accordingly.