Palantir Technologies (NASDAQ:PLTR) and Oracle (NYSE:ORCL) are both reaping the benefits of the artificial intelligence (AI) surge.
Palantir is experiencing rapid growth and is quickly adopting various artificial intelligence platforms. On the other hand, Oracle is not growing as quickly, but its substantial cloud backlog and aggressive AI infrastructure development present an entirely different kind of opportunity for investors.
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Which is better?
In the first quarter of 2026, Palantir’s revenue jumped 85% year over year to $1.6 billion, with U.S. commercial revenue rising 133% to $595 million. Notably, the company’s adjusted operating margin hit 60%, and its adjusted free cash flow margin stood at 57%. The retention rate of 150% indicates strong spending growth from existing clients. Additionally, AI tools are becoming core to their business operations, suggesting that Palantir’s growth is more stable than what’s typical in the AI hype.
However, the company’s price-to-earnings ratio is quite high, around 153.9 times, and its sales multiple is about 62.7 times, which really leaves little room for mistakes.
Meanwhile, Oracle’s growth rate has slowed, yet it trades at a more reasonable valuation of about 34.7 times earnings and 8.7 times sales. Analysts predict that Oracle’s sales will increase by around 20% year over year to about $19.1 billion in the fourth quarter of 2026. Sales jumped 21.7% from the previous year, and the adjusted operating margin was at 43%. The remaining performance obligations also surged by 325% to $553 billion, providing a clearer view of future AI cloud demand.
One area of concern is that Oracle’s AI backlog still needs to translate into operational data center capacity. The company estimates that capital expenditures for fiscal 2026 will be around $50 billion. Furthermore, Oracle plans to raise between $45 billion and $50 billion in 2026 for data center expansion. However, all this spending is putting a strain on cash flow. The potential for Oracle is significant, but it hinges on funding, the speed of construction, power availability, cost management, and the evolving needs of customers in AI computing.
In conclusion, while Palantir appears to be the stronger player, Oracle offers a more appealing risk/reward scenario.
Should you buy Palantir Technologies stock now?
Before making any decision to buy Palantir Technologies stock, it’s wise to reflect on several factors:
