Prediction: This Super Software Growth Stock Will Be Worth More Than Palantir by 2030

Adam Spatacco, The Motley Fool

Sat, May 3, 2025, 8:10 AM 6 min read

• Artificial intelligence (AI) has redefined Palantir's business.

• Over the last two years, the company's valuation has risen more than 17-fold.

• While AI will continue to be a massive opportunity for Palantir, another player in the software realm may have more upside over the next five years.

The allure of artificial intelligence (AI) has dominated the stock market for over two years. AI is not just an interest among investors -- it's become a bit of an obsession. And one stock that investors just can't seem to get enough of is data analytics specialist Palantir Technologies (NASDAQ: PLTR).

As of this writing (April 30), Palantir stock sports a share price of roughly $117 -- just a stone's throw away from its 52-week high. That's quite a feat considering the S&P 500 and Nasdaq Composite have struggled mightily throughout the course of 2025, thanks to a lagging technology sector.

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In the piece below, I'll detail Palantir's epic rise and soaring valuation throughout the AI revolution. More importantly, let's explore why another emerging software business could be the better buy as it has the potential to eclipse Palantir's size over the next several years.

Palantir was founded over 20 years ago. For most of its history, the company concentrated on the public sector -- working closely with the U.S. military and its allies in the defense world. Given the lumpy nature of government contracting, Wall Street was skeptical of Palantir's growth potential when the company went public in 2020. Some skeptics viewed Palantir as a consulting agent for the government and not so much a high-flying software business.

This narrative started changing exactly two years ago. In April 2023, Palantir released its fourth major enterprise tool, called the Artificial Intelligence Platform (AIP). In the table below, I've summarized some key performance indicators around Palantir's business prior to and following the release of AIP.

Data source: Palantir.

The growth speaks for itself. AIP has been a transformative piece of infrastructure for Palantir, allowing the company to swiftly penetrate the private sector, accelerate revenue, and widen profit margins. While Palantir deserves a lot of credit, investors may be getting a little too excited. In just two years, the company's market capitalization has ballooned by more than 17 times. To add another layer of perspective here, Palantir currently trades for 100 times its trailing-12-month sales.