Growth stock investing hasn't been easy in 2025. The U.S. stock market has swung between sharp corrections and narrow trading ranges, making it very difficult to build conviction. Despite this, the most reliable long-term investment strategy remains the same: choosing stakes in companies with established business models and the ability to turn innovative technologies into actual profits.
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That's where Palantir (PLTR 1.87%) and CrowdStrike (CRWD 3.86%) come into play. These companies play a critical role in building modern business infrastructure, encompassing data intelligence and cybersecurity. Hence, these stocks can prove smart buys in the long run.
1. Palantir Technologies
Since its debut in 2020, Palantir has been a Wall Street favorite, riding the wave of artificial intelligence (AI), machine learning, and data analytics in the enterprise world. Though it began as a defense-focused analytics player, its Gotham and Foundry platforms have also proved exceptionally successful in the commercial sector. More recently, its Artificial Intelligence Platform (AIP) is also gaining serious traction.
NASDAQ: PLTR
Key Data Points
What sets the company apart from its peers is its extensive focus on AI implementation and ontology (a data framework to relate real-world entities, assets, and relationships in an organization with their digital counterparts). While competitors focus on AI models, Palantir has been working on deploying AI systems in a production environment to resolve customer pain points. Its ontology-based approach has also created a sticky customer base, as it makes Palantir's platform an essential component of the client's decision-making system.
Palantir's recent financials are also impressive. In the first quarter of 2025, revenue grew 39% year over year to $884 million, with U.S. commercial business expanding 71% year over year. U.S. commercial revenue reached a $1 billion annual run rate for the first time. Palantir also closed $810 million in U.S. commercial total contract value (TCV), implying a 239% year-over-year growth rate in the first quarter.
Additionally, Palantir has $5.4 billion in cash and negligible debt, which provides it with the financial flexibility to invest aggressively in AI initiatives. Plus, the company also generated a healthy adjusted free cash flow of $370 million in the first quarter.
It is undeniable that the company's valuation is stretched, considering it is trading at almost 208 times forward earnings. However, considering its robust tailwinds, even accounting for potential overvaluation, the stock appears to be a smart long-term buy now.
2. CrowdStrike
CrowdStrike's stock initially tumbled following its first-quarter fiscal 2026 (ending April 30) earnings report in early June but has since recovered most of those losses. While investors may have been disappointed by the company's revenue performance and conservative guidance, the quick recovery suggests that patient investors are already recognizing the underlying strength of this cybersecurity leader.
NASDAQ: CRWD
Key Data Points
CrowdStrike reported $1.1 billion in revenue in the first quarter. While the revenue just met analysts' expectations, the other numbers were pretty impressive. The company added $194 million in net new annual recurring revenue (ARR), double-digit millions higher than the company's expectations, while also maintaining a 97% customer retention rate. This highlights the mission-critical nature of the company's business and the high customer loyalty it enjoys, even in a challenging economic environment. Additionally, despite a negative free-cash-flow impact of $61 million related to last year's outage incident, CrowdStrike generated $279.4 million in free cash flow in the first quarter -- representing 25% of revenue.
But even more impressive is that the total deal value of accounts using CrowdStrike's Falcon Flex program has reached $3.2 billion, which is more than sixfold on a year-over-year basis. Instead of expanding the security suite module by module, customers are increasingly preferring Falcon Flex's flexible, consumption-based licensing model. Here, they pre-purchase cybersecurity credits, which are then used to access various Falcon modules as needs arise, without going through lengthy procurement processes each time. Besides increasing revenue visibility, Falcon Flex is also helping accelerate the sales cycle. This is evident considering that 39 customers came back for "re-Flex" deals within just five months of their initial contracts.
CrowdStrike's AI-powered conversational and agentic security assistant, Charlotte AI, is also proving to be a major differentiator. Trained on CrowdStrike's proprietary threat intelligence and security data collected from its vast global client base, Charlotte automates Level 1 threat analysis (high-level analysis of an organization's cybersecurity risks based on publicly available data). Furthermore, companies are expected to deploy billions of AI agents in the next decade, which will have access to internal and external data stores, applications, and machines. While improving productivity and cost efficiency, these AI agents will also increase the size, severity, and speed of enterprise attacks. CrowdStrike is positioning itself to be a significant beneficiary of this evolving market opportunity.
CrowdStrike is also committed to returning capital to shareholders. The company has authorized a $1 billion share buyback program, which appears feasible given its $4.6 billion in cash and consistently strong cash generation.
CrowdStrike isn't cheap at roughly 28.8 times sales. But considering the non-discretionary nature of cybersecurity spending in the current threat environment and the company's robust offerings, the stock seems an attractive long-term pick even at elevated valuation levels.
