Palantir, while previously a strong performer, faces significant risks due to high valuations and reliance on government contracts. In contrast, Salesforce is poised to lead in agentic AI with its Agentforce, and SentinelOne is strategically aligned with Lenovo to enhance its cybersecurity offerings, presenting attractive investment opportunities.
Palantir Technologies, despite its recent highs, has seen its stock price rise to an extreme valuation—trading at a staggering forward price-to-sales (P/S) multiple of 52. While its revenue has surged 36% last quarter, fueled by a remarkable 64% increase in U.S. commercial revenue, Palantir’s close ties to the U.S. government, which accounts for over 40% of its revenue, pose significant risks. With government budget cuts looming, investors might consider alternative options.
Enter Salesforce, a pioneer in customer relationship management (CRM) software that has branched into automation and analytics through acquisitions like Mulesoft and Slack. The company strives to lead the next wave of AI—agentic AI, which not only generates content but also autonomously executes tasks. Through its Agentforce solution, Salesforce has already garnered 5,000 deals, including 3,000 paying contracts since its October launch, and it offers a compelling pricing structure at $2 per conversation.
SentinelOne emerges as another potential investment, focusing on AI-powered cybersecurity with its Singularity Platform which protects endpoints against cyber threats. Competing with CrowdStrike, it has gained traction by efficiently resolving system attacks. A significant boost is on the horizon as Lenovo will start shipping PCs equipped with SentinelOne’s platform, tapping into the lucrative PC market, where Lenovo sells nearly 62 million units annually. The stock’s P/E ratio remains enticingly low at under 5 times fiscal 2026 analyst estimates.
In light of Palantir’s high valuation and potential risks, investors might find better prospects in Salesforce and SentinelOne. Salesforce is poised to dominate the agentic AI space, offering a robust framework with its Agentforce solution, while SentinelOne’s strategic partnership with Lenovo positions it favorably within cybersecurity. Both stocks provide a blend of innovation and affordability, making them worthy alternatives for those exploring AI investments.
Original Source: www.fool.com
