Core Viewpoint - Palantir Technologies has experienced significant growth but is highly valued, while Alibaba, despite slower growth, presents a more sustainable valuation opportunity in the current market environment [1][6]. Palantir Technologies - Palantir's annual revenue increased from $1.1 billion in 2020 to $2.9 billion in 2024, achieving profitability in 2023 and more than doubling its net income in 2024 [2]. - Analysts project Palantir's revenue and earnings per share (EPS) to grow at a CAGR of 38% and 63%, respectively, from 2024 to 2027 [3]. - The growth is supported by increased government contracts and the expansion of its commercial business, with geopolitical factors favoring its Gotham platform and rising demand for its Foundry services [4]. - Palantir's current market cap is $423 billion, trading at over 300 times next year's earnings and 75 times next year's sales, indicating a potential market cap reduction to $227 billion if valuations normalize [5]. Alibaba Group - Alibaba, the largest e-commerce and cloud infrastructure company in China, trades nearly 50% below its all-time high due to regulatory fines, COVID-19 lockdowns, and U.S.-China trade tensions [7][8]. - The company is stabilizing its business by expanding into higher-growth overseas markets and enhancing its logistics platform [9]. - Alibaba's cloud infrastructure is benefiting from the rollout of its large language models (LLMs) and increased spending on cloud services driven by the AI boom [10]. - From fiscal 2025 to fiscal 2028, Alibaba's revenue and EPS are expected to grow at a CAGR of 8% and 12%, respectively, while trading at just 19 times next year's earnings and 2.3 times next year's sales [11][12]. - If Alibaba meets analysts' expectations and achieves a valuation of four times its forward sales, its market cap could nearly double to $710 billion, potentially surpassing Palantir's market cap [13].