Palantir Technologies(NASDAQ: PLTR) was the stock with the best results in S&P 500 last year. The company started to see great momentum with its artificial intelligence (AI) platform, as its focus on workflow and AI application layers has led many companies to test its solution. It still has a big opportunity as it begins to transition customers from proof of concept to production.
Still, the strong rally in Palantir’s stock has left it with an astronomical valuation, trading forward price to sales ratio (P/S) 40 times fiscal 2025 estimates for a company that just grew its revenue by 30% last quarter. That’s more than double the software-as-a-service (SaaS) peak from a few years ago when SaaS stocks were up in the mid-30% range. Meanwhile, Palantir executives, including the CEO, chairman and chief technology officer, among others, have been selling shares aggressively over the past few months.
Image source: Getty Images.
Let’s look at two other stocks benefiting from AI trading at much lower valuations that investors can consider.
Nvidia(NASDAQ: NVDA) is one of the biggest users of artificial intelligence, as the graphics processing units (GPUs) it designs have become the backbone of the artificial intelligence infrastructure. As a result, the company’s revenues have skyrocketed, including a 94% increase in revenue last quarter.
Although its stock has risen over the past few years, it still trades at an attractive valuation with a forward price-to-earnings (P/E) ratio below 31 based on analyst estimates for 2025 and a price-to-earnings-to-growth (PEG) ratio of approximately 0 ,96. A PEG ratio of less than 1 is generally considered undervalued, but growth stocks will often have PEG ratios well above 1.
Nvidia still has a big opportunity ahead of it. As tech giants and AI startups race to create better and better AI models, they need exponentially more computing power, and thus GPUs, to train these models. While Meta platform‘ The Llama 3 model was trained on 16,000 GPUs, and xAI’s Grok 3 was trained on 20,000 GPUs, Meta’s Llama 4 model was trained on 160,000 GPUs, and xAI’s Grok 4 was trained on 200,000 GPUs- and. Meanwhile, there is talk of future AI models being trained using 1 million GPU clusters in the not too distant future.
As the GPU leader, Nvidia is poised to continue to benefit greatly from this AI infrastructure build. Its CUDA software platform helped it establish a wide moat in the space, as it was long ago the first GPU company to introduce software that allowed chips to be programmed for tasks other than graphics rendering. As such, CUDA became the de facto platform on which developers learned to program these chips. With the introduction of numerous AI-specific microlibraries and developer tools, CUDA continues to be a big differentiator for the company.
On the AI software side, Salesforce(NYSE: CRM) The stock is an attractively priced alternative to Palantir, which trades at 7.7 times analyst estimates for next year.
Although its value is much lower, the company has a large potential opportunity for artificial intelligence with its Agentforce solution. Salesforce aims to become a leader in agentic AI, which is generally considered the next step beyond generative AI. With agent-based AI, AI agents will work autonomously within parameters to perform complex tasks on their own with little human supervision required. While generative AI will tell you the best way to do something, agentic AI will just go out and do it itself.
With its Agentforce solution, Salesforce says its AI agents can be used for a number of tasks across industries. For example, in retail, its autonomous AI agents can learn from customers’ behavior and preferences and act as a digital gatekeeper that speaks to them in a natural way. Meanwhile, it can be used for customer service in various industries to resolve billing complaints by reviewing past invoices, identifying issues and confirming disputes.
Agentforce is a usage-based product that costs $2 per conversation. On its earnings call in early December, Salesforce said it has already closed 200 deals with Agentforce since launching in October and has thousands of potential deals in the pipeline. 1 billion Agentforce AI agents are projected to be deployed by the end of fiscal 2026 (end January 2026).
Meanwhile, the company is innovating quickly, releasing Agentforce 2.0 after its fiscal third quarter earnings report. New features with Agentforce 2.0 include a no-code platform that allows users to build their own tools, the ability to work outside of Salesforce’s suite of products, and integration into its Slack product.
While Salesforce isn’t growing as fast as Palantir, it still appears to be at the beginning of a big AI opportunity and is trading at a fraction of its value.
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Randi Zuckerberg, former director of market development and Facebook spokesperson and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has no position in any of the listed stocks. The Motley Fool has positions in and recommends Meta Platforms, Nvidia, Palantir Technologies and Salesforce. The Motley Fool has a disclosure policy.
