Better AI Stock to Buy Now: Palantir vs. Alphabet

Core Insights - Alphabet and Palantir Technologies are both significant beneficiaries of artificial intelligence, with Alphabet's stock rising due to AI integration in its platforms, while Palantir experiences accelerated growth attributed to AI leverage [2][3] Group 1: Company Performance - Palantir's second-quarter revenue increased by 48% year over year to approximately $1 billion, up from 39% growth in the previous quarter, driven by 53% growth in U.S. government revenue and 93% growth in commercial revenue [4] - Palantir achieved a GAAP operating margin of 27%, generated $569 million in adjusted free cash flow, and ended the quarter with $6 billion in cash and no debt [5] - Alphabet continues to grow robustly across its various segments, including Search, YouTube, and Cloud, although not at the extraordinary rates seen by Palantir [8] Group 2: Valuation and Market Position - Palantir's stock price reflects high expectations, with a forward price-to-earnings ratio exceeding 200 and a price-to-sales ratio well above 100, indicating limited room for error [7] - Alphabet's valuation is considered more reasonable compared to Palantir, making it a more forgiving investment option despite slower growth [8]