Prediction: 2 Artificial Intelligence (AI) Stocks Will Be Worth More Than Palantir Technologies in 3 Years

Palantir's market value of roughly $369 billion after a 150% one-year surge sets a benchmark the author believes AppLovin and Shopify could match within three years — AppLovin (market cap $176B) would need a 110% gain (about 28% annualized) and Shopify ($192B) a 93% gain (about 24% annualized). AppLovin, an AI-driven adtech firm focused on mobile games, has rapidly scaled a new e-commerce ad platform to a $1 billion ARR, seen ad spend ~4x since rolling out Axon 2.0, and carries consensus EBITDA/earnings growth of ~53% CAGR that could justify a move from a 66x to ~39x multiple if it hits targets. Shopify, the leading omnichannel commerce platform with payments and merchant services and multiple AI initiatives to automate storefronts and shopping experiences, faces a steeper starting multiple (108x) but consensus ~32% earnings CAGR could still push its value toward $370B if it accelerates enterprise, wholesale and international adoption; the author favors AppLovin given its more reasonable valuation upside, while acknowledging Shopify's execution track record could still deliver the outcome.

Analysis

Palantir's one-year, 150% share-price surge leaves it valued at roughly $369 billion, a benchmark the author argues AppLovin ($176 billion) and Shopify ($192 billion) could match within three years — AppLovin needs a 110% gain (about 28% annualized) and Shopify a 93% gain (about 24% annualized). This framing converts consensus earnings-growth projections into target market-cap scenarios and highlights valuation compression if earnings accelerate as expected.

AppLovin's thesis rests on AI-driven adtech execution: its e‑commerce advertising platform reached a $1 billion ARR within months, ad spend has quadrupled since Axon 2.0 in mid‑2023, and Morgan Stanley labels Axon a "best‑in‑class" machine‑learning engine. Street forecasts call for ~53% annual earnings growth over three years, implying the current ~66x earnings multiple could fall toward ~39x if growth materializes, supporting the author's view that AppLovin offers the cleaner path to $370 billion given its nearer-term monetization signals.

Shopify's case relies on its omnichannel leadership, payments and merchant services, and multiple AI initiatives to automate storefronts and developer productivity; G2 and Forrester endorsements underscore product strength. Consensus ~32% earnings CAGR could push market value toward $370 billion but starts from a steeper ~108x multiple, so execution on enterprise, wholesale and international expansion is the key risk/reward differentiator.

Key Decisions for Investors

• Consider a relative overweight to AppLovin versus Shopify given AppLovin's faster consensus earnings CAGR (53% vs 32%) and clearer early monetization signals such as the $1B ARR e‑commerce product,
• Monitor three execution indicators closely before adding exposure: Axon ad‑spend growth and self‑service global rollout milestones for AppLovin, and enterprise/wholesale adoption, international merchant traction, and AI monetization metrics for Shopify,
• If adding positions, size them with scenario-based stop or hedges because both names trade at high multiples today (AppLovin ~66x, Shopify ~108x) and outcomes depend on meeting aggressive consensus growth assumptions,
• Use quarterly earnings and guidance as decision points; materially missed growth or slower product rollouts should prompt trimming exposure, while consistent beats that compress multiples toward the cited targets warrant constructive re‑weighting