Artificial intelligence (AI) has the potential to change almost every industry under the sun, and companies are largely consumed to remain in front of the curb. AI drive software can automate simple tasks, and make knowledge workers more effective and productive in their jobs. It can also help the decision makers to combine the relevant data points to make better decisions with a faster pace.
The AI software AI software market is expected to increase with $ 98 billion in $ 2024. At $ 391 billion until 2030, according to ABI Research. Generative AI solutions, such as AI agents, will grow even faster. Two companies are at the forefront of the Entrepreneurial Program Software on AI: Palantir Technologies(NASDAQ: PLTR) and Microsoft(NASDAQ: MSFT).
Palantir produces software that combines data from all business jobs and performs insights for its users. The introduction of his artificial intelligence platform (AIP) has made it easier for everyone to start working with data analysis software through natural language thanks to the power Large language models. This has triggered acceleration in Palantir’s results in the last two years.
Palantor noted that revenue increased 29% compared to the year in 2024, while its custom operating margin increased to 39% compared to 28% in the previous year. In the fourth quarter, they give even better results for revenue growth (36%) and for profitability (45% margin). The odds of management for 2025 suggest that revenue growth is 31% and an adapted operating margin that increases to 42%.
Palantir is significantly used from the scale as a software company with minimal border costs. Executive director Alex Karp uses the first approach to building business, focusing on a great product for several selected clients with deep pockets. As the product improves and adds more features, it becomes more attractive to a wider group of companies. AIP was key to spreading its usefulness for multiple companies.
Palantir has two key segments: government and commercial. He began exclusively on the challenges facing the US army, and his state platform continues to represent most of his revenue. Government contracts are generally very sticky, which provides a solid database for Palantar.
Accordingly, Palantir could face the winds in the midst of growing geopolitical tensions and how the US government looks to reduce consumption. Like the rest of the Federal Government, the Pentagon is currently facing a steep decrease in the budget, which could adversely affect the highest source of revenue of the palalanti. On the other hand, some believe that the budget reduction could benefit from palalalanti, because workers make it more effective and efficient, increasing the need for their software if the army reduces staff.
In the midst of political tensions, Palantir wants to highlight his success outside the Government’s contracts. His Aipcon had a number of new commercial clients from around the world. As commercial clients grow, Palantir should be able to continue to create strong revenue growth and expand their operating margin.
The big problem Palantir stock is its estimate. Even after a recent sale, he divides the store over 70 times more than 2024. If you use Outlook Management 2025, the price is 55 times higher than projected sales for the current year. Only a few shares were traded so huge multiple. And history has not struggled with the purchase at the prices that are comparable to Palants.
Microsoft catapulted himself at the forefront of the discussion of AI when he added $ 10 billion to the Openi investment in early 2023. Since then, he has become a leader on two fronts of the growing artificial intelligence market: cloud computing and entrepreneurial software.
Microsoft’s cloud computing platform, Azure, has noted significant growth in the last two years because companies seek to access computer and basic cloud models to develop new AI solutions for their business or new products on AI drives for their customers. The administration announced that the AS of Azure services increased from the latest quarter of 157%, contributing to 31% of the total growth in the cloud computing segment.
The administration also said that demand for AI services exceeded its capacity, indicating that it could grow even faster in the future. And Microsoft is sure to invest in to take the opportunity. This year it will invest $ 80 billion on capital expenditures, mainly at AI data centers. These growing consumption will also support the growing demand of its Azure Cloud platform and Microsoft’s own AI development.
For this purpose, Microsoft has developed its assistant line, called Copilot, for use on various software platforms, including Github, Microsoft 365 and Dynamics 365. Companies can also use Microsoft’s Copilot Studio to use their own information and create their own AI agents to help them automate tasks and superficial useful insights for workers. The early adoption of the co -pilot led to the growth of revenue and extension of the margin for the Microsoft segment of productivity and business processes.
Microsoft may not grow as fast as Palantar, but its shares also trade for a much more reasonable evaluation for significant growth that provides investors. You can currently buy shares for less than 11 times larger than your past. Looking at your earnings potential, trade shares for approximately 29 times more than analysts to make money earnings over the next year. Neither is particularly cheap, but these estimates are below average multiple since the beginning of 2021. A company leadership in AI on two fronts is sure to deserve a premium, and the current price is attractive for what you get.
Microsoft looks like a much better shopping than Palantar shares after a recent sale in both.
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Adam Levy It has positions in Microsoft. Motley Fool has positions and recommends Microsoft and Palantir Technologies. Motley Fool recommends the following options: Long January 2026. $ 395 calls Microsoft and short January 2026. $ 405 calls to microsoft. Motley Fool has disclosure rules.
