The stocks of SoundHound AI (SOUN 3.66%) and GitLab (GTLB 1.81%) have both had a rough go in 2025. The former trades down more than 40% on the year, as of this writing, while the latter has lost more than 30% of its value.
However, both stocks could be poised to rebound in 2026. Let's take a close look to see which one has the better opportunity to outperform next year.
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The case for SoundHoundAI
SoundHound's underperformance in 2025 has more to do with investors learning that Nvidia exited the position it took in the stock in Q4 2024 than it does with the company's actual performance. SoundHound has been growing its revenue rapidly, with it more than doubling through the first nine months of the year.
The company has established itself as a leader in voice artificial intelligence (AI), as its "speech-to-meaning" and "deep meaning understanding" technology can understand someone's intent even before they are finished talking, allowing it to interact with people in a more natural and flowing way. This helped it gain strong traction in the automobile industry, where vehicle makers were looking for better AI voice assistants, as well as the restaurant industry.
NASDAQ: SOUN
Key Data Points
However, as we enter 2026, the company's biggest opportunity is with voice-powered AI agents. The company acquired a company called Amelia, which was strong in virtual agents, and has since combined the two companies' technologies to make a push with AI voice-powered agents. Amelia also brought with it a solid customer base in different verticals, such as retail, financial services, and healthcare.
SoundHound is now pushing its AI agent technology with the rollout of its Amelia 7 platform. Amelia has some low-gross-margin customers, so this new platform is also an opportunity to improve the margins at Amelia's legacy customers.
The case for GitLab
Like SoundHound, GitLab's stock performance in 2025 wasn't really reflective of its operating results. The company has grown its revenue by between 25% to 35% for each of the last nine quarters, showing its strong consistency.
However, the company has been subject to the narrative that it will be an AI loser, with the notion that AI agents will replace coders. For those unfamiliar with GitLab, it runs a DevSecOps (development, security, and operations) platform, which is a secure environment for organizations to create software. The bearish argument is that with AI, organizations will reduce their number of programmers, which will hurt GitLab and its seat-based subscription model.
NASDAQ: GTLB
Key Data Points
Thus far, that hasn't been the case, with the company continuing to both add new customers and see strong growth with existing customers, as reflected in its 119% dollar-based net retention over the past 12 months. Any number above 100% reflects growth from customers who have been with the company for a year or more, after any churn.
Ironically, the bulk of this growth has come from seat expansions, which is exactly what bears are betting will start to deteriorate. It hasn't, but the stock nonetheless hasn't been able to shake the bearish case.
However, the company has also been taking steps to protect itself if such a scenario unfolds. It recently introduced a hybrid seat-plus-usage-based model, which should also help drive growth. The company's solution has become more valuable with the introduction of its own AI tools, such as Duo Agent, and it is now much more of a comprehensive end-to-end software development life cycle (SDLC) platform that saves coders time and customers money.
Meanwhile, the stock is very attractively valued, trading at a price-to-sales multiple of just 5.7 times fiscal year 2027 (ending January 2027) analyst estimates for a company with high 80% gross margins and strong mid-20% revenue growth.
The verdict
I think that SoundHound and GitLab can both nicely rebound in 2026. However, my pick to outperform is GitLab.
I think the market is overestimating the potential negative impact of AI on GitLab and underestimating its opportunity. I think the platform is sticky (as evidenced by its net dollar retention), and that the new pricing model could be a nice growth driver, as will continued Duo Agent adoption, which nicely expands ARPU (average revenue per user).
Meanwhile, there aren't going to be all these AI agents running around unchecked, as they too will need to be managed and audited within the confines of a centralized platform like the one offered by GitLab. The stock is too cheap, and I think the bear case fades away with another year of strong revenue growth.
