What's the "it" stock right now? Many investors would probably vote for Palantir Technologies (PLTR 2.01%). I'd go along with them.
Palantir is, without question, one of the hottest stocks on the market. It's the biggest gainer in the S&P 500 (^GSPC 0.72%) so far this year, almost doubling year to date as of the market close on July 15. However, one artificial intelligence (AI) stock has outperformed Palantir.
Bringing AI to the warehouse
As hot as Palantir has been, Symbotic (SYM 0.75%) has been even hotter -- at least so far in 2025. Shares of the AI-powered supply chain robotics company have skyrocketed by around 105% compared to Palantir around 95%.
NASDAQ: SYM
Key Data Points
Rick Cohen founded Symbotic in 2007. Cohen wanted to address the distribution challenges that he'd seen firsthand at his family's business, C&S Wholesale Grocers, the largest wholesale grocery supply company in the U.S.
Symbotic's technology automates the processing of pallets and cases. Its fully autonomous mobile robots, called Symbots, move goods throughout the company's proprietary storage facilities. These Symbots are controlled by AI software developed by Symbotic.
The company has assembled an impressive roster of customers. Retail giant Walmart (WMT +1.25%) is Symbotic's largest customer, accounting for roughly 87% of revenue in the last fiscal year. Walmart is also an investor in Symbotic. Other key customers include Greenbox (a joint venture between Symbotic and SoftBank (SFTB.Y 1.20%)), Albertsons (ACI +0.88%), C&S Wholesale Grocers, and Target (TGT +3.55%).
Image source: Getty Images.
Behind Symbotic's spectacular performance
Symbotic's revenue soared 40% year over year in the second quarter of fiscal 2025. That's slightly higher than Palantir's revenue growth in its latest quarter. Unlike Palantir, though, Symbotic remains unprofitable.
I suspect many investors are encouraged by Symbotic's significant gross margin improvement, due in large part to eight lower-margin projects wrapping up.
You can't help but be impressed by Symbotic's nearly $23 billion backlog. Even better, this backlog continues to grow, and the company's future looks bright.
Another important recent milestone for Symbotic was its acquisition of Walmart's Advanced Systems and Robotics (ASR) business in January 2025. This deal opens the door for Symbotic to compete in the micro-fulfillment market, which involves using small fulfillment centers near customers to accelerate order processing and shorten delivery times. Symbotic estimates that the Walmart ASR acquisition adds more than $300 billion to its total addressable market in the U.S.
Is Symbotic stock still a buy?
Is this high-flying AI stock still a buy? I think the answer is "yes" for long-term investors.
Granted, Wall Street might seem to view Symbotic stock as overbought. The consensus 12-month price target for the stock is more than 30% lower than the current share price. However, I suspect this is largely the result of Symbotic stock soaring so quickly. Of the 19 analysts surveyed by LSEG in July, two rated the stock as a "strong buy" with nine rating it as a "buy."
Some investors could be concerned about Symbotic's valuation. Shares trade at 238 times forward earnings estimates. However, that's lower than Palantir's forward earnings multiple of 263. More importantly, earnings-based metrics aren't as useful for Symbotic at this point. However, the company's price-to-sales ratio of 2.4 is quite reasonable (especially compared to Palantir's P/S ratio of 119.)
Symbotic's total addressable market, with the Walmart ASR acquisition included, is over $1.2 trillion. The company's technology gives it a leg up in capturing much of this market. Its relationship with Walmart and other retail and wholesale leaders also helps.
I don't know if Symbotic's current momentum is sustainable, but I expect this stock will continue to be a winner over the next decade and beyond. Symbotic might not be the "it" stock that Palantir is, but perhaps it should be.
