Palantir vs. Alphabet: Which AI Stock Should You Buy Now?

AI is powering the stock market’s biggest gains, but Wall Street has a clear favorite between Palantir and Alphabet. 

Key Takeaways

• Both Palantir and Alphabet have surged since 2022, riding the AI wave.
• Wall Street expects Alphabet to keep climbing, but warns Palantir could fall.
• The difference? Valuation, growth prospects, and market confidence.

Palantir: Rapid Growth, High Price

Palantir’s Artificial Intelligence Platform (AIP) has made its software easier for businesses to use, leading to explosive growth. U.S. commercial revenue jumped 54% in 2024 and over 70% in early 2025. This growth boosted Palantir’s profit margins from 24% in early 2023 to 44% in 2025’s first quarter.

Palantir expects to keep growing, forecasting 36% revenue growth and maintaining a 44% operating margin for 2025. However, the stock is trading at more than 75 times expected sales and over 160 times forward EBITDA—much higher than any other software company.

Even with strong results, the high price could limit future returns. Most analysts predict a 20% drop in Palantir’s stock over the next year, with only a few recommending it as a buy.

Alphabet: Facing Challenges, Still a Strong Bet

Alphabet, Google’s parent company, faces regulatory pressure and a court ruling that may force it to sell assets like Chrome. There’s also competition from AI chatbots, which are reducing searches on Apple’s Safari browser—a key revenue source for Google.

Despite these issues, Alphabet’s core business remains strong. Google Search revenue grew 10% in the first quarter, thanks to new AI features like AI Overviews, which increase user engagement and ad revenue. YouTube also grew 10%, and Waymo (Alphabet’s self-driving car service) is expanding rapidly, now completing over 250,000 rides per week.

Alphabet’s biggest growth engine is Google Cloud, which saw 28% revenue growth and rising profit margins as demand for AI infrastructure grows.

The stock is cheap compared to its earnings—just 18.2 times forward estimates. Most analysts see 16% upside in the next year, with a strong majority rating it a buy.

Bottom Line: Wall Street’s Pick

• Palantir: Strong growth, but the stock is too expensive. Most analysts expect a price drop.
• Alphabet: Facing challenges, but its diverse businesses and reasonable price make it Wall Street’s favorite for future gains.