Palantir Stock Is Interesting, but Here's What I'd Buy Instead

2026-02-09 04:50:00 ET

Palantir Technologies (NASDAQ: PLTR) has become one of the most important companies in the artificial intelligence (AI) software space. Its Artificial Intelligence Platform (AIP) has become the leading operating system of its type for organizations that are aiming to take AI from a nice feature to have to one that helps them solve their most pressing problems.

This has led to rapid revenue growth acceleration over the past two years, with the company both adding a plethora of new customers and seeing established customers quickly expand their spending with it. At the same time, its largest customer, the U.S. government, has expanded its use of Palantir's solutions as it embraces AI and works to modernize its infrastructure. As a result, Palantir's revenue surged 70% year over year last quarter, marking the tenth straight quarter its revenue growth has accelerated. Its revenue grew by just 13% in Q2 2023, so AIP has truly been transformational.

While I think Palantir can eventually grow to become one of the world's largest AI companies , the stock is currently trading at a pricey forward price-to-sales (P/S) ratio of 45 times, based on analysts' estimates for 2026. As such, I think this smaller AI stock could have more upside.

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