Prediction: This Artificial Intelligence (AI) Stock Could Beat Palantir in 2026. Now Is a Great Time to Buy It Hand Over Fist

Palantir’s recent surge has left its shares richly valued with much future growth priced in, while Snowflake presents a cheaper, AI-driven alternative: Snowflake reported fiscal Q3 product revenue up 29% to $1.16 billion and adjusted EPS up 75% to $0.35, with 12,600 customers (+20% Y/Y), 7,300 weekly users of its AI features (1,200 building AI agents), RPO of $7.9 billion (+37% Y/Y) and raised fiscal‑2026 product‑revenue guidance to $4.45 billion (+28%). Those metrics reflect strong cross‑sell and monetization of AI tools (serverless GPUs, Cortex) that are expanding spend from existing customers (net revenue retention 125%), implying durable earnings leverage without heavy incremental marketing spend. Analysts project 2026 revenue of ~$6.2 billion for Palantir (+40%) and ~$5.7 billion for Snowflake (+24%), but Snowflake’s substantially lower sales multiple could translate into materially higher upside (an illustrative 20x sales multiple implies ~50% market‑cap upside to $114 billion versus roughly 7% upside implied by Palantir’s $200 median target), suggesting Snowflake may outperform in 2026 absent a sharp re‑rating of Palantir.

Analysis

Snowflake's fiscal Q3 performance and AI adoption metrics indicate accelerating monetization: product revenue grew 29% year‑over‑year to $1.16 billion and adjusted EPS rose 75% to $0.35, total customers increased to just over 12,600 (+20% Y/Y), and management reported 7,300 weekly users of AI features with 1,200 customers building AI agents. The company raised fiscal‑2026 product‑revenue guidance to $4.45 billion (up 28% Y/Y) and reported RPO of $7.9 billion (+37% Y/Y), while net revenue retention was a robust 125%, underscoring strong cross‑sell and contractual visibility driven by serverless GPUs and the Cortex AI platform.

Valuation and growth contrast with Palantir creates a relative opportunity: Palantir has outpaced Snowflake on price this year (~140% vs ~44%), and analysts model Palantir revenue rising ~40% to $6.2 billion in 2026 versus Snowflake ~24% to $5.7 billion, but Snowflake trades at a materially cheaper sales multiple. Using the article's illustrative math, Snowflake trading at 20x next‑year sales implies roughly 50% market‑cap upside to $114 billion, while Palantir's $200 median target implies only ~7% upside, making Snowflake the more attractive risk/reward if execution continues.

Key Decisions for Investors

• Consider increasing exposure to Snowflake relative to Palantir given Snowflake's cheaper valuation, raised fiscal‑2026 guidance to $4.45 billion, strong RPO (+37%) and 125% net revenue retention, while keeping position sizes aligned with risk tolerance
• Size new Snowflake purchases to capture the illustrated upside (article: ~50% to a $114B market cap if 20x sales) but set clear triggers—trim or hedge if RPO conversion, net retention, or AI adoption metrics weaken
• Avoid initiating or add-on purchases of Palantir at current levels unless there is clear evidence of sustained upside re‑rating or materially better-than-consensus 2026 guidance, since the article implies limited upside (~7%) from median targets
• Monitor weekly AI feature users (7,300), AI agent builders (1,200), quarterly RPO conversion and guidance revisions as the primary signals to increase, hold, or reduce exposure; consider modest hedges around key earnings events if positions are large