Palantir Technologies (PLTR +1.69%) has become one of the most important companies in the artificial intelligence (AI) software space. Its Artificial Intelligence Platform (AIP) has become the leading operating system of its type for organizations that are aiming to take AI from a nice feature to have to one that helps them solve their most pressing problems.
This has led to rapid revenue growth acceleration over the past two years, with the company both adding a plethora of new customers and seeing established customers quickly expand their spending with it. At the same time, its largest customer, the U.S. government, has expanded its use of Palantir's solutions as it embraces AI and works to modernize its infrastructure. As a result, Palantir's revenue surged 70% year over year last quarter, marking the tenth straight quarter its revenue growth has accelerated. Its revenue grew by just 13% in Q2 2023, so AIP has truly been transformational.
NASDAQ: PLTR
Key Data Points
While I think Palantir can eventually grow to become one of the world's largest AI companies, the stock is currently trading at a pricey forward price-to-sales (P/S) ratio of 45 times, based on analysts' estimates for 2026. As such, I think this smaller AI stock could have more upside.
UiPath
NYSE: PATH
Key Data Points
Palantir's AIP became the orchestration layer for generative AI. UiPath (PATH 5.17%) is looking to follow a similar path and make its Maestro platform the orchestration layer for AI agents. UiPath previously established itself as a leader in robotic process automation (RPA), which is the use of software bots to automate simple, rule-based tasks such as data entry and customer onboarding.
While the RPA business would seemingly be at risk of being disrupted by AI, bots are much cheaper to use than AI agents, so they will still have their place. Meanwhile, UiPath's RPA background gave it the governance and compliance basis, as well as connections to legacy systems, to serve as the foundations of its Maestro AI orchestration platform. Its platform is designed to be the Switzerland of agentic AI, helping manage and coordinate AI agents from various vendors, while also being able to assign software bots to simpler tasks where appropriate to help its clients save money. As AI agents begin to proliferate, having a platform to effectively manage them will become increasingly important. That should be a big growth driver for UiPath.
Image source: Getty Images.
At the same time, UiPath's stock trades at a cheap forward P/S multiple of just 3.7. If it can start to accelerate its sales growth in a similar way to what Palantir achieved a couple of years back, the stock could have huge upside.
