Bram Berkowitz, The Motley Fool

Fri, Jun 27, 2025, 3:00 AM5 min read

• Both Palantir and Alphabet have been popular stocks in recent years due to investors' belief that they can capitalize on the burgeoning artificial intelligence sector.

• Palantir's stock crushed it but now faces challenges due to its sky-high valuation.

• Alphabet struggled this year due to concerns about its large search business, which faces antitrust concerns and threats from artificial intelligence chatbots.

• 10 stocks we like better than Palantir Technologies ›

Both Palantir Technologies (NASDAQ: PLTR) and Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) plan to capitalize on the artificial intelligence revolution, and already have to a certain extent. But their stocks have been on very different paths this year. Palantir ripped close to 90% and looks invincible, while Alphabet slumped along with some of the other tech giants in the "Magnificent Seven" and is down 9% this year. Based on recent research reports, Wall Street is split on one of these stocks but rates the other as a strong buy.

Palantir wowed investors with its artificial intelligence platforms that can gather, organize, and analyze data in ways never imagined. The company started by mainly catering to various departments of the U.S. government.

Palantir's Gotham platform has been used by the government in its counter-terrorism efforts. Gotham can pull in data from different sources and find hidden trends or insights from that data. Gotham can also help people plan and analyze potential responses to events, allowing them to weigh the pros and cons of big moves or actions. Palantir's platform is easy for people to use even if they aren't familiar AI language models.

Palantir has also shown that it can help companies better organize and use their data to find insights that will help them better run their business. The company's Foundry platform enables companies to compile and organize their data all in one place. Foundry helps businesses track how certain data projects are built, which makes it easier for others to replicate, maintain, and update the projects, while also allowing management to quickly test new ideas.

Many investors are convinced Palantir has a long runway ahead, but the difficult part about the stock is its enormous valuation of 247 times forward earnings, which seems to have left Wall Street analysts split. Of the 17 analysts that issued research reports over the last three months, three say to buy the stock, 11 say hold, and four say sell, according to TipRanks.