Artificial intelligence (AI) has redefined palantir business.
Over the past two years, the company's valuation has risen more than 17 times.
Although AI will continue to be a huge opportunity for Palantir, another player in the software zone may get more upside down over the next five years.
Allure artificial intelligence (AI) has dominated the stock market for over two years. AI is not just investors – it has become a bit of an obsession. And one stock that investors can't seem to get enough of it is a data analytics specialist Palantir Technologies(NASDAQ: PLTR).
From this writing (April 30), Palantir Stock sports a share price of about $ 117-just a stone's throw away from its highest 52 weeks. That is a great deal of consideration of the S&P 500 and NASDAQ Compound Has struggled throughout 2025, thank you Technology sector behind.
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In the passage below, I will detail the epic rising of palantir and ascend valuation Throughout the AI Revolution. More importantly, let's explore why other emerging software business could be the better purchase as it has the potential for palant -size eclipse over the next few years.
Palantir was established over 20 years ago. For most of its history, the company focused on the public sector – working closely with the US military and its allies in the defense world. Given the government's contracted lumpy nature, Wall Street was skeptical of the potential of palantir growth when the company became public in 2020. Some skeptics considered palletir as a government consulting agent and not so much high -flight software business.
This narrative began to change exactly two years ago. In April 2023, Palantir released its fourth large enterprise instrument, called the Artificial Intelligence Platform (AIP). In the table below, I have summarized some key performance indicators around Palantir business before and after AIP release.
Category
Q1 2022 (Before AIP)
Q4 2024 (Latest Published Financial)
Government customers
93
140
Commercial customers
184
571
The total revenue
$ 446 million
$ 827 million
Net income
($ 101 million)
$ 79 million
Customized free cash flow
$ 29.8 million
$ 517.4 million
Data Source: Palantir.
The growth speaks for himself. AIP has been a transformative piece of infrastructure for palantir, allowing the company to penetrate the private sector quickly, accelerate revenue, and expand profit margins. While Palantir deserves a lot of credit, investors may get a little too excited. In just two years, the company's market capitalization has more than 17 times. To add another layer of perspective here, Palantir is currently trading for 100 times its drag-12 month sales.
Currently, smart investors are wondering when a palantir will hit its ceiling. While AI should remain a long tail for the company, there will come a time when its pricing multiples are beginning to normalize. Over the next five years, expectations are likely to be higher and higher with all passing reports that pass. My hunt is that the triple digit returns from palantir stock could be in the rearview mirror for the time being. By 2030, I would not be surprised if a palitable valuation was largely unchanged compared to where it is today.
Image source: Getty images.
The software company I think with more potential than paved over the next five years is cyber security company Crowdstrike(NASDAQ: Cropped). In the world of investment, Crowdstrike has become somewhat polarization over the past year due to a high profile security cut that includes the company's software.
The biggest tail I see for a crowd in the coming years is the company's unique site at the intersection of two large, expanding, directed market (TAMS): AI and Cyber Security. According to Statista, the TAM for AI in cyber security is expected to reach $ 134 billion by 2030 – an increase of more than four times compared to its size at the end of 2024.
While last summer's security cut has brought a lot in negative public relations, Crowdstrike has choked and has been performing quite well over the last many quarters. Despite any perceived reputation damage, the company's annual circular revenue (ARR) does not continue to grow on an impressive clip and its ability to produce a constant loose cash flow does not appear to be at stake.
Similar to Palantir, Crowdstrike stock trades for premium. In fact, Crowdstrike is trading at the highest P/S ratio when benchmarking against a large peer group of leading cyber security businesses.
In a way, though, I think this premium suggests that growth investors look past the company's hiccups from last year and bought into the long -term growth narrative around AI and cyber security. Taking this one step further, despite a crowdstrike premium, its current P/S multiplic number is slightly lower than where last year was before the security cut – as shown above about the July 2024 time frame.
I see Crowdstrike as a compelling purchase and holding opportunity over the next few years and think the company's growth potential is in its early chapters. For these reasons, I think Crowdstrike has more tail-tail compared to a palant, and I see the company becoming a higher value business by the next decade.
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Adam Spatacco He has jobs in Palantir Technologies. The Motley Fool has jobs in and recommends CloudFlare, Crowdstrike, Fortinet, Okta, Palantir Technologies, and Zscaler. The Motley Fool recommends Palo Alto Networks. The fool has motley and Disclosure Policy.
