In a noteworthy development within the tech investment landscape, Palantir Technologies has demonstrated remarkable stock performance, driving a strong interest from investors. The artificial intelligence (AI) software company has recorded a staggering 143% increase in its stock value in 2025, marking its success in significantly outperforming the broader market. Over a three-year span, Palantir shares have skyrocketed by an astonishing 2,800%. Despite this success, there are concerns regarding the sustainability of such high valuations, which currently sit at a sales multiple of 122 and earnings multiple of 435. Analysts suggest that the company must continue to exceed expectations remarkably to justify this premium.
With questions surrounding Palantir’s valuation, investors are increasingly considering alternatives, particularly Alphabet Inc. The tech giant’s stock, while rising by 253% over the past three years, has not garnered attention comparable to Palantir’s surge. However, Alphabet has made strides in enhancing its AI capabilities, particularly with its Google Gemini chatbot, which now commands 18% of the generative AI web traffic—a significant rise from the previous year. This growth has come at the expense of OpenAI’s ChatGPT, which has seen its market share decline from 87% to 68%.
Alphabet’s integration of Gemini across various platforms such as its Chrome browser, Android operating system, and Google Workspace has allowed it to monetize its AI capabilities effectively. The company offers subscription tiers for Gemini, catering to a variety of user needs from image generation to research and writing tasks. Forecasts indicate that the AI software market could expand from $122 billion in 2024 to $467 billion by 2030, placing Alphabet in a prime position to capitalize on this growth.
Potential further expansion is on the horizon as Alphabet considers selling its custom Tensor Processing Units (TPUs) to third parties, such as Anthropic, which recently announced a substantial investment to enhance its AI capabilities using Google Cloud technologies. This move could potentially allow Alphabet to capture a significant portion of the AI chip market, with revenue projections reaching up to $900 billion. Given its present revenue of approximately $385 billion, unlocking this market could vastly increase Alphabet’s financial performance.
In light of its sustained momentum over the past six months—where its stock price has surged by more than 76%—Alphabet is trading at more accessible valuations of approximately 10 times sales and 28 times forward earnings, making it that much more appealing compared to Palantir’s current metrics. Analysts predict that as Alphabet’s growth accelerates, its stock could receive higher valuations, hinting at substantial upside potential in the years to come.
