Consider whether it's more profitable to abandon Palantir and invest in these three technology companies instead.
In the rapidly evolving world of artificial intelligence (AI), one company is standing out for its strong growth profile and relatively reasonable valuation compared to industry leader Palantir Technologies (PLTR). That company is AppLovin (APP), a tech firm specialising in AI-driven ad targeting to accelerate sales.
While Palantir, known for its advanced platforms such as Gotham, Foundry, and recently introduced AIP, continues to drive double-digit revenue growth, its forward price-to-sales (P/S) multiple exceeds 120, a level that many analysts consider excessively high. This implies that the market expects near-perfect growth for years to come from Palantir, a level of optimism that some view as a bubble.
In contrast, AppLovin, despite its strong potential in the AI space, trades at a more reasonable valuation. This reflects strong growth prospects but less speculative optimism, making it a potentially safer bet for investors seeking AI exposure without the valuation risk associated with Palantir.
Other AI and data analytics players like Snowflake and Databricks are also contenders, but their forward P/S multiples relative to Palantir were not disclosed in the search results.
Meanwhile, other tech giants are also making significant strides in AI. Meta Platforms (META) is investing heavily in AI, with CEO Mark Zuckerberg aiming to build "personal superintelligence." Meta has begun to serve ads on its popular messaging app, WhatsApp, and new social media platform, Threads. The company plans to spend "hundreds of billions of dollars" building out next-generation AI infrastructure, including multiple AI superclusters.
Alphabet (GOOGL -0.27%, GOOG -0.23%) is another tech giant leveraging AI. Its fast-growing cloud business, YouTube, and custom AI Tensor Processing Unit chips contribute to its AI capabilities. Google's new AI-powered Search Mode has been found more useful than traditional search by 82% of users, according to Oppenheimer.
Amazon Web Services (AWS) is the market-share leader, offering platforms like Bedrock and SageMaker to make it easier for developers to build and run AI models. Amazon is integrating AI across its logistics, warehouse automation, and delivery operations to improve efficiency and save costs. The e-commerce giant is also deploying increasingly sophisticated robots that can detect damaged goods, handle odd-shaped packages, and even repair themselves.
Amazon is using AI to predict the best warehouses to store items and to optimize delivery routes. The company is also monetizing AI through its ad network, as demonstrated by features like "Shop with AI." Google, with its unmatched reach as a content discovery platform and one of the world's best ad networks, can also monetize AI in similar ways.
In the race for AI dominance, Palantir Technologies is not left behind. Its technology is used in various applications, including military operations, hospital sepsis identification, and logistics streamlining. Palantir's Artificial Intelligence Platform (AIP) links data from various sources to real-world assets and processes.
However, Palantir's valuation remains high, with a forward P/S multiple of over 91 times 2025 analyst revenue estimates. This makes it a more expensive option compared to AppLovin, which trades at a more reasonable valuation.
In the AI race, AppLovin seems to be a less pricey winner based on analyst revenue estimates and valuation metrics. As the market continues to evolve, it will be interesting to see how these companies fare in the long run.
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