The tech sector faced significant headwinds in 2025, with voice AI pioneer SoundHound AI (SOUN) and DevOps platform GitLab (GTLB) among the notable decliners. Their shares have shed over 40% and 30% year-to-date, respectively. However, market analysis suggests both companies possess the fundamental drivers for a potential significant rebound in 2026.
The critical question for investors is: which presents a more compelling opportunity?
SoundHound’s stock weakness appears largely tied to news of major shareholder Nvidia exiting its position in late 2024, rather than deteriorating business fundamentals. In fact, the company has demonstrated robust revenue growth, with its top line more than doubling in the first nine months of the fiscal year.
The company’s core investment thesis hinges on its deep technological moat and strategic execution. Its proprietary “Speech-to-Meaning” and “Deep Meaning Understanding” technologies enable real-time intent recognition, securing its leadership in the automotive and restaurant industries. The strategic acquisition of virtual agent specialist Amelia has been pivotal, allowing SoundHound to integrate advanced technology while gaining immediate access to customer bases in retail, financial services, and healthcare. This positions the company at the forefront of the burgeoning voice AI agent market.
Furthermore, the recent launch of the Amelia 7 platform aims not only to expand functionality but also to improve the profitability profile of its existing customer base, marking a key strategic move for enhancing overall margins.
Market narratives have focused on the perceived threat that AI coding tools pose to GitLab’s seat-based subscription model, fearing they could reduce the need for human programmers. This view, however, overlooks the platform’s inherent adaptability and resilient growth trajectory.
A significant divergence exists between GitLab’s operational strength and its current market valuation, presenting overlooked positives. The company showcases remarkable consistency, having delivered revenue growth between 25% and 35% for nine consecutive quarters. A dollar-based net retention rate of 119% powerfully underscores strong customer stickiness and expansion momentum. Proactively evolving its business model, GitLab has introduced a hybrid “seat-plus-usage” pricing structure to ensure long-term growth sustainability. Simultaneously, by integrating AI-powered tools like Duo Agent, it has transformed into a more comprehensive, end-to-end software development lifecycle platform. This evolution enhances customer efficiency and drives higher average revenue per user (ARPU).
Despite this robust performance profile—characterized by nearly 90% gross margins and sustained revenue growth expectations above 20%—the stock trades at a forward Price-to-Sales multiple of just 5.7x based on fiscal 2027 (ending Jan. 2027) estimates. This positions GitLab at a notably low valuation, providing substantial room for a potential share price recovery.
While both stocks are poised for a potential rebound in 2026, GitLab currently offers a more favorable risk/reward profile. The market appears to be over-discounting the hypothetical risks posed by AI while underestimating GitLab’s entrenched role as an essential platform for managing and auditing AI-driven development itself. Its solid fundamentals, flexible pricing strategy, and attractive valuation set the stage for a potential re-rating as the company continues to deliver strong financial growth in the coming year.
For SoundHound AI, the path to a sustained recovery will require investors to closely monitor the commercialization velocity of its AI agent business and tangible improvements in profitability.
