This Artificial Intelligence (AI) Stock Has Outperformed Palantir in 2025. Is It Still a Buy?

Symbotic (SYM), an AI-powered supply chain robotics firm, has seen its stock surge approximately 105% in 2025, outperforming Palantir, driven by a 40% Q2 FY25 revenue increase and a growing $23 billion backlog. While currently unprofitable, the company exhibits improving gross margins and recently expanded its total addressable market (TAM) to over $1.2 trillion through the acquisition of Walmart's ASR business, reinforcing its critical relationship with Walmart, which constitutes 87% of its revenue. Despite some analyst short-term price target caution, Symbotic's strategic positioning and reasonable price-to-sales ratio suggest strong long-term growth potential in automated logistics.

Analysis

Symbotic (SYM) has demonstrated exceptional market performance in 2025, with its stock price appreciating approximately 105%, outpacing other prominent AI stocks. This surge is fundamentally supported by strong operational results, including a 40% year-over-year revenue increase in its second fiscal quarter of 2025. Crucially, the company's future revenue stream is significantly de-risked by a nearly $23 billion and growing backlog, indicating high demand for its AI-powered warehouse automation solutions. While Symbotic remains unprofitable, it is showing positive momentum in its financial health, evidenced by improving gross margins as legacy lower-margin projects conclude. The strategic acquisition of Walmart's Advanced Systems and Robotics (ASR) business is a pivotal development, expanding Symbotic's total addressable market to over $1.2 trillion and enabling entry into the micro-fulfillment sector. However, this deepens an already significant customer concentration, with Walmart accounting for 87% of revenue. Despite the stock's rapid ascent leading to a consensus price target more than 30% below its current price, the valuation appears more reasonable on a price-to-sales basis (2.4x) than on forward earnings, and a majority of surveyed analysts maintain a buy rating.

Key Decisions for Investors

• Given the stock's 105% year-to-date run-up and a consensus price target lagging the current price, investors should evaluate Symbotic based on its long-term potential within a $1.2 trillion addressable market rather than short-term momentum.
• The heavy customer concentration, with Walmart representing 87% of revenue, constitutes the primary risk factor; therefore, closely monitoring the health and expansion of this relationship is critical for any investment thesis.
• Focus should be placed on tracking key performance indicators beyond revenue, specifically the rate of backlog conversion and sustained gross margin improvement, as these are the clearest signals of the company's path to profitability and operational scalability.