Key Takeaways:
- Palantir Technologies’ stock has surged 143% in 2025, but its valuation is a concern, with a sales multiple of 122 and earnings multiple of 435.
- Alphabet’s stock has the potential to win big from the proliferation of AI in 2026 and beyond, with a growing share of the generative AI market and a massive opportunity in the AI software market.
- Alphabet’s Google Gemini chatbot now controls 18% of generative AI web traffic, and the company is monetizing it through subscription tiers.
- The AI software market is expected to grow from $122 billion in 2024 to $467 billion in 2030, and Alphabet is poised to capitalize on this opportunity.
- Alphabet’s potential sale of its Tensor Processing Units (TPUs) to third parties could corner a fifth of the AI chip market and translate into a $900 billion revenue opportunity.
Introduction to Palantir’s Success
Palantir Technologies has been on a remarkable run, with its stock soaring 143% in 2025, outperforming the broader market by a huge margin. As the article notes, "Palantir stock has jumped by 2,800% over the past three years." However, the company’s growth is accelerating at a solid pace, and it has a big enough revenue pipeline to maintain its momentum. Despite this, the stock’s lofty valuation is a point of concern, with a sales multiple of 122 and earnings multiple of 435. As the article states, "the company will have to continue outperforming expectations by wide margins to eventually justify its current sales multiple of 122 and earnings multiple of 435."
Alphabet’s AI-Fueled Growth Potential
Alphabet’s stock, on the other hand, has not seen the same level of growth as Palantir’s, rising by 253% over the past three years. However, the company’s AI credentials have received significant boosts lately, with its Google Gemini chatbot now controlling 18% of generative AI web traffic, more than triple its share from the year-ago period. As the article notes, "Alphabet’s growing share of this space isn’t surprising, given that the company has integrated Gemini across different applications, including its Chrome browser, its Android smartphone operating system, its Google Search engine, and the Google Workplace productivity tools." This integration has allowed Alphabet to monetize Gemini through various subscription tiers, enabling users to deploy the AI assistant for generating images, creating videos, and carrying out research and writing tasks.
The AI Software Market Opportunity
The AI software market is expected to grow from $122 billion in 2024 to $467 billion in 2030, according to ABI Research. Alphabet is poised to capitalize on this massive opportunity, with its Gemini chatbot and other AI-related initiatives. As the article states, "Research firm Pivotal Research estimates that Gemini’s prospects could send Alphabet stock to $400, which would be a jump of 27% from current levels." However, the long-term opportunities in AI software and other AI-related catalysts that Alphabet is sitting on could help it easily surpass that mark. For example, Alphabet’s potential sale of its TPUs to third parties could corner a fifth of the AI chip market and translate into a $900 billion revenue opportunity.
The Potential Sale of TPUs
There are reports that Alphabet is considering selling some of its TPUs to third parties, which could be a significant catalyst for the company’s growth. As the article notes, "Analyst Gil Luria of financial services company D.A. Davidson says that if Alphabet decides to sell its TPUs to third parties, it could corner a fifth of the AI chip market in the long run." This could translate into a $900 billion revenue opportunity for the company, which is significant considering Alphabet has generated just over $385 billion in revenue in the trailing 12 months. As the article states, "Given that Alphabet has generated just over $385 billion in revenue in the trailing 12 months, the potential opportunities discussed above indicate that it can significantly increase its top line in the long run."
Conclusion and Outlook
In conclusion, while Palantir’s stock has been on a remarkable run, its valuation is a concern. Alphabet’s stock, on the other hand, has the potential to win big from the proliferation of AI in 2026 and beyond. With its growing share of the generative AI market, massive opportunity in the AI software market, and potential sale of TPUs, Alphabet is poised for significant growth. As the article notes, "There is a good chance that Alphabet stock will sustain its newly found momentum in 2026." With its attractive valuations, including a price-to-sales ratio of 10 and a forward price-to-earnings ratio of 28, Alphabet’s stock is an attractive option for investors looking to capitalize on the AI trend.
https://www.fool.com/investing/2026/01/03/missed-out-on-palantir-1-no-brainer-artificial-int/