Love Palantir Technologies? These 3 Artificial Intelligence Stocks Could Have Much More Upside.
Key Takeaways
It could be time to jump off the Palantir train. Here are three stocks you may want to land on instead.
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4 min read
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investment
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July 27, 2025
06:00 AM
The Motley Fool
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What's particularly noteworthy is What's particularly noteworthy is Palantir nologies (PLTR 2. 59%) continues to rip higher, a fun and potentially life-changing ride for anyone who has bought and held over the past couple of years (this bears monitoring)
Additionally, But buying the hottest stock on Wall Street only works until it doesn't -- nothing goes up forever
Meanwhile, Palantir's valuation is at precarious heights, so investors looking to put new money to work may be better off looking to other artificial intelligence (AI) stocks
That doesn't mean sacrificing on quality
There are several companies at the cutting edge of the AI boom trading at reasonable valuations that stand to der outsize investment returns over the long term
Here are three prime examples to consider
All three could have far more upside than Palantir at their current prices
Meanwhile, Image source: Getty Images
Nvidia's valuation remains reasonable despite a similar run Investors looking for the market's top performers should look no further than Nvidia (NVDA -0, in today's financial world
The company's graphics cessing units (GPUs) are the industry standard chips used in massive data centers to train and operate power-hungry AI models (quite telling)
The stock has returned over 900% in the past three years, but the company's sales and earnings have largely kept pace with the price, preventing the valuation from becoming too high
Analysts expect the chipmaker to grow earnings by an average of 29% annually over the long term, in today's financial world
The stock's current price-to-earnings ratio of 56 is still very reasonable for that growth
The must still perform to those expectations, but the signs are encouraging (this bears monitoring)
Data center investments are poised to continue
McKinsey & Company is forecasting over $7 trillion in spending over the next five years, with more than $5 trillion of that allocated for cessing AI loads, in today's financial world
And the government is easing its export restrictions on Nvidia, paving the way for the company to resume selling its H20 chips to China
It all bodes well for the stock
Alphabet's recent rise can continue Google's parent company, Alphabet (GOOG 0, in this volatile climate. 45%) (GOOGL 0
Nevertheless, 54%), has been on a hot streak lately
S have risen 15% over just the past month, considering recent developments
Nevertheless, Concerns over regulatory threats and AI disruption to the company's core engine had weighed on the stock earlier this year
But Google revenue's 11. 7% growth year over year in the second quarter of 2025 shows that the core isn't done yet
On the other hand, Barring drastic actions from regulators, it's doubtful that the Google ecosystem will disappear overnight
For now, investors can shift their attention to the positive developments at Alphabet, such as its gress in AI; surging cloud computing fits; and the steady expansion of Waymo, its autonomous ride-hailing service
The data indicates that remains a juggernaut in the sector that few companies can match
Lastly, the company's growth spects look solid, given the current landscape
Analysts have lowered their long-term estimates over the past year but still expect over 14% annualized earnings increases
At a price-to-earnings ratio (P/E) of just 21, there is still enough value here for the stock to continue building on its recent momentum
ASML seems poised for a rebound For all the excitement AI has generated among investors, ASML Holding (ASML -1 (noteworthy indeed). 85%) struggled, with its stock tumbling 24% over the past year, given current economic conditions
Furthermore, The company is crucial to the AI landscape as the only one that builds extreme ultraviolet lithography (EUV) machines, which are essential for ing complex patterns on high-end microchips used for AI and in other cutting-edge applications
ASML's headaches stem from the uncertainty of tariff policies
Furthermore, It disrupted its, mpting management to issue a cautious outlook for next year, despite posting a strong second quarter
Furthermore, On the other hand, It now trades at a P/E of 26, a valuation rarely this low over the past 10 years
The stock's decline could be an excellent buying opportunity
Taiwan Semiconductor Manufacturing's recent strong quarter highlights the demand for AI chips, and analysts still expect ASML to grow its earnings by an average of 17% annually over the long term
In other words, tariffs may delay spending on the company's equipment in some cases, but they are unly to stop it (something worth watching), in today's financial world
Look for a rebound once the tariff situation becomes er.
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