Despite its recent pullback, Palantir Technologies (PLTR 1.60%) still ranks as one of the hottest stocks on the market this year. Some investors are no doubt mulling over whether or not to buy on the dip.
You might want to look elsewhere first. I predict that the following three magnificent stocks will be worth more than Palantir by 2028.
Image source: Getty Images.
1. Alibaba
One of the main reasons to jump on the Palantir bandwagon is to profit from the artificial intelligence (AI) boom. However, Chinese technology company Alibaba (BABA 4.04%) looks like a more appealing AI stock right now.
Alibaba's market cap of around $282 billion is well below Palantir's market cap of $370 billion. But that gap isn't overly problematic, in my view. Two factors work to Alibaba's advantage.
Let's start with valuation. Palantir's forward price-to-earnings (P/E) ratio is a sky-high 244. Alibaba seems dirt cheap in comparison, with its shares trading at only 13.8 times forward earnings. The obvious objection is that Palantir is growing much more rapidly. That's true, but even with growth factored in, Alibaba's shares are much less expensive with a price-to-earnings-to-growth (PEG) ratio of 1.25 compared to Palantir's PEG ratio of 4.12.
That leads me to the second factor that should help Alibaba: Its growth will almost certainly accelerate going forward. China is determined to be a leader in AI. Alibaba will play a major role in this effort as the country's leading cloud-services provider and one of the top developers of AI technology.
2. ASML
ASML's (ASML 2.66%) business model is much different than Alibaba's. However, this stock shares similar advantages that should enable it to grow faster than Palantir over the next three years.
Although ASML isn't the bargain that Alibaba is, its valuation is still much more attractive than Palantir's. Shares of the Dutch semiconductor fabrication-equipment company trade at roughly 26.7 times forward earnings. Its PEG ratio (based on five-year earnings growth projections) of 1.51 is also only a fraction of Palantir's PEG multiple.
Unlike China, the Netherlands hasn't committed to dominating AI. However, ASML's home country doesn't need such a goal when the company itself already commands a near monopoly in extreme ultraviolet lithography (EUV) -- a technology that's critical to making the chips needed to power AI applications.
ASML expects to generate revenue between 44 billion euros ($52 billion) and 60 billion euros ($70 billion) by 2030. The high end of that range is more than double the company's 2024 revenue. Palantir might grow at a faster rate, but I think its lofty valuation will prevent its share price from moving in lockstep. ASML shouldn't have this problem.
3. UnitedHealth Group
Once upon a time, UnitedHealth Group (UNH 1.24%) was bigger than Palantir is now. And we don't have to look far in the past: The healthcare giant's market cap topped $500 billion as recently as April. I predict UnitedHealth will rebound and become larger than Palantir again by 2028 and probably sooner.
I'm optimistic about UnitedHealth Group because I think its issues are only temporary. What are those issues? First, the company's medical costs, especially related to its Medicare Advantage plans, are much higher than anticipated this year. Second, the U.S. Department of Justice is conducting civil and criminal investigations into UnitedHealth's Medicare billing practices.
The first issue should be easy to resolve. All UnitedHealth Group needs to do is raise health insurance premiums enough to offset the higher medical costs. Management intends to check off this box with 2026 premiums. The second issue isn't so easy. However, UnitedHealth Group has survived DOJ probes in the past and flourished. I suspect it will do so again.
With shares trading at the lowest earnings multiples in more than a decade, I view UnitedHealth Group stock as a steal right now. I'm in good company: Billionaires Warren Buffett and David Tepper aggressively bought the beaten-down health insurance stock in the second quarter of 2025. By the way, I suspect neither Buffett nor Tepper is likely to touch Palantir with a 10-foot pole.
