Palantir (PLTR +1.66%) and UiPath (PATH +1.20%) are both well poised to profit from the secular expansion of the artificial intelligence (AI) market. Palantir aggregates and analyzes large amounts of data for government agencies and large companies, while UiPath develops software robots for automating repetitive tasks across large organizations.
I compared these two AI stocks last October and concluded that Palantir's stronger growth, superior scale, and rising profits made it a better buy than UiPath. Since then, Palantir's stock has soared more than 340% while UiPath's stock has only risen about 13%. Let's take a fresh look at both companies to see if Palantir remains the stronger AI play.
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The differences between Palantir and UiPath
Palantir operates two main platforms: Gotham for its government customers and Foundry for its commercial customers. Both platforms aggregate data from disparate sources to help their clients spot trends and make more informed decisions. Gotham is already widely used across the U.S. government to plan military and law enforcement missions, and it leverages that battle-hardened reputation to promote Foundry to more commercial customers.
UiPath's robotic process automation (RPA) tools can be integrated into an organization's software to automate repetitive tasks like onboarding customers, entering data, processing invoices, and sending out mass emails. It's also been rolling out more AI services to analyze the data that flows through those software robots. It's now the world's largest RPA company by a wide margin.
In their latest fiscal years, Palantir generated twice as much revenue as UiPath. Palantir has also been profitable on a generally accepted accounting principles (GAAP) basis since 2023, while UiPath is expected to generate its first GAAP profit in fiscal 2026 (which ends next March).
Which company is growing faster?
From 2020 to 2024, Palantir's revenue grew at a CAGR of 27% from $1.1 billion to $2.9 billion. Its GAAP net income more than doubled in 2024 as it reined in its spending.
Its top-line growth decelerated in 2022 and 2023 as it struggled with lumpy government spending and intense macro headwinds for its commercial business. But in 2024 and 2025, its growth accelerated again. The military conflicts in Ukraine and the Middle East drove many of its government customers to ramp up their spending on its data crunching services, and more enterprise customers signed up for its services as the macro environment stabilized.
From 2024 to 2027, analysts expect Palantir's revenue and GAAP earnings per share (EPS) to grow at a CAGR of 41% and 37%, respectively. That explosive growth could be fueled by the expansion of its U.S. commercial business, new Department of Defense contracts, and its overseas expansion. The ongoing AI boom should also drive more organizations to use its data aggregation platforms to support their latest AI applications.
NASDAQ: PLTR
Key Data Points
From fiscal 2021 to fiscal 2025, UiPath's revenue grew at a CAGR of 24% from $608 million to $1.4 billion as it gradually narrowed its GAAP losses. However, its top-line growth decelerated in fiscal 2023, fiscal 2024, and fiscal 2025 -- when its revenue only rose 9%.
It mainly blamed that slowdown on a challenging macro environment, which drove more companies to rein in their software spending, but it also faces intense competition from new generative AI tools (like OpenAI's ChatGPT), which can automate many of the same tasks. The bears believe those generative AI services will render UiPath's rigid RPA tools obsolete, but the bulls believe its tools will evolve, stay relevant, and help those AI services analyze more data.
From fiscal 2025 to fiscal 2028, analysts expect UiPath's revenue to grow at a CAGR of 9% as its business matures. But as its growth cools off, it's cutting costs and streamlining its business. That's why analysts expect it to turn profitable on a GAAP basis in fiscal 2026, then grow its GAAP EPS at a CAGR of 72% over the following two years.
NYSE: PATH
Key Data Points
Which stock is a better value?
Palantir is clearly the stronger company, but it's already trading at 83 times next year's sales. That meme stock valuation could limit its upside potential and set it up for a steep pullback during the next market downturn. UiPath faces more near-term challenges as the AI market evolves, but it looks more reasonably valued at five times next year's sales. I wouldn't rush to buy either of these stocks right now. But if I had to choose one over the other, I'd stick with UiPath this time because Palantir simply seems too hot to handle.
