Better Artificial Intelligence (AI) Stock: Palantir vs. Snowflake

Tech stocks have struggled this year amid tariff-driven turmoil, but Palantir Technologies (up 63%) and Snowflake (up 32%) have defied the odds with significant gains driven by their AI initiatives. Palantir’s revenue growth is faster, but Snowflake offers better bottom-line growth and a cheaper valuation. Investors will need to weigh these factors carefully before choosing between the two.

In a year marked by volatility, tech stocks have seen better days. Amidst the turmoil, the Nasdaq Composite has struggled, feeling the weight of tariffs and market pressures, even hitting a low of 24% at one point. However, two companies, Palantir Technologies (NASDAQ: PLTR) and Snowflake (NYSE: SNOW), have managed to stand tall with impressive gains this year—Palantir’s stock soaring by 63% and Snowflake’s by nearly 32%, largely thanks to their strides in artificial intelligence (AI).

Looking to squeeze in a $1,000 investment? Our analyst team has rolled out their picks for the “ten best stocks to buy right now.” But if you’re stuck choosing between Palantir and Snowflake as your only AI stock, let’s delve deeper and see which might be the better option.

Palantir’s case is compelling when we take its innovative Artificial Intelligence Platform (AIP) into account. Launched about two years back, this platform promises to enhance productivity and efficiency for both commercial and government clients, driving down operational costs. It has quickly gained traction, contributing to the company’s rapid revenue growth—from an 18% increase in Q1 2023 to a staggering 39% jump in Q1 2025. The trend suggests Palantir is riding the AI wave effectively.

Moreover, the signs of growth are visible in its remaining deal value (RDV), which rose an astonishing 45% year-over-year, now sitting at $6 billion. This suggests not just a retention of contracts, but a picture where new deals are being acquired faster than they can be fulfilled. With the AI software market projected to reach $153 billion by 2028, Palantir seems positioned for significant future growth.

Switching gears to Snowflake, this company has fashioned its data cloud platform as a hub for data management, securely allowing clients to consolidate their data. The transition to enable users to create and deploy AI applications has further amplified its potential. Their investment in graphics processing units (GPUs) facilitates heavy-duty computations for AI applications, letting consumers tap into powerful AI tools without the hefty upfront costs.

Snowflake’s appeal is evident: nearly 45% of its clientele is using these AI services. Year-on-year, they saw a customer count increase of 19% in the latest quarter. Furthermore, product revenue jumped 26% while remaining performance obligations surged 34%, showcasing a strong appetite for their offerings. With a massive $342 billion addressable market for its platform by 2028, Snowflake, like Palantir, is poised to thrive in this AI-centric growth.

In a nutshell, both companies demonstrate robust growth metrics that point toward a bright horizon. That said, Palantir is currently growing its revenue faster than Snowflake, yet Snowflake’s bottom-line growth of 71% outpaces Palantir. At the heart of the decision between the two lies valuation. While both companies may seem expensive, Snowflake offers a more affordable entry point for investors wary of volatility, compared to Palantir’s steep price tags.

Before diving into Palantir Technologies, there’s something you may want to consider. The Motley Fool’s analyst team has crafted a fresh list of what they believe are the top ten must-buy stocks, and surprisingly, Palantir isn’t among them. Historically, past picks like Netflix and Nvidia have shown remarkable returns—a $1,000 investment in each would have transformed into hundreds of thousands of dollars. Market performance under the Stock Advisor banner stands impressively at 978%, in stark contrast to the S&P 500’s 171%. Don’t let this opportunity slip through your fingers.

Keep in mind, Harsh Chauhan—who authored this analysis—holds no positions in any discussed stocks. The Motley Fool has its stakes in both Palantir and Snowflake. Opinions expressed here are solely those of the author and not necessarily of Nasdaq, Inc.

When weighing the options between Palantir and Snowflake, both companies show promising growth prospects within the AI sector. Palantir leads in revenue growth, while Snowflake shines in profitability segments. Ultimately, choosing between them boils down to risk tolerance: while Palantir appeals to those ready for volatility, Snowflake offers a more budget-friendly option for investors looking to avoid higher stakes. Investors should also consider alternatives recommended by analysts for potentially higher returns.

Original Source: www.nasdaq.com