2 Artificial Intelligence (AI) Stocks to Buy Before They Soar 100% and 184%, According to Wall Street Analysts

Wall Street analysts are flagging Palantir Technologies and AppLovin as key beneficiaries of the AI revolution, despite their contrasting valuations. Palantir reported robust Q1 revenue growth of 39% and raised its 2025 guidance, yet its stock is noted for an "absurdly rich" 325x adjusted earnings, tempering analyst projections of 184% upside to a $1 trillion market cap. In contrast, AppLovin, driven by its AI ad targeting engine, saw Q1 revenue surge 40% and GAAP earnings jump 149%, and is deemed reasonably valued at 64x earnings, with analysts projecting 100% upside.

Analysis

Wall Street analysts identify Palantir (PLTR) and AppLovin (APP) as significant beneficiaries of artificial intelligence, though they present sharply contrasting investment profiles. Palantir demonstrates strong operational momentum, with Q1 revenue rising 39% to $884 million—its seventh consecutive quarter of acceleration—and full-year 2025 revenue guidance revised upward to 36% growth. However, its valuation is a major point of concern, trading at a prohibitive 325 times adjusted earnings, which appears excessive against a 30% forecasted annual earnings growth rate through 2026. In contrast, AppLovin's differentiated AI-driven ad engine, Axon, fueled a 40% surge in Q1 revenue to $1.4 billion and a 149% increase in GAAP earnings. The company guides for 69% advertising sales growth in the second quarter. At 64 times earnings, its valuation is considered reasonable, especially in light of Wall Street's expectation for 55% annual earnings growth through 2026 and the potential upside from a new self-service platform, making its risk-reward profile appear more favorable than Palantir's.

Key Decisions for Investors

• Given Palantir's valuation at 325 times adjusted earnings, which significantly outpaces its projected 30% annual earnings growth, investors should view the stock with caution and await a substantial price correction before establishing a position.
• AppLovin's combination of strong top-line momentum, 149% GAAP earnings growth, and a more reasonable valuation of 64 times earnings presents a compelling case for investors seeking growth-at-a-reasonable-price exposure to the AI theme.
• Monitor the development of AppLovin's self-service ad platform, as its successful launch is a key potential catalyst that management believes will unlock a massive opportunity and could help realize the 100% upside outlined in Morgan Stanley's bull-case scenario.