Comparing Shares in Artificial Intelligence: Palantir (PLTR) vs. Alibaba (BABA)

Comparing Shares in Artificial Intelligence: Palantir (PLTR) vs. Alibaba (BABA)

In the dynamic world of technology, two companies stand out for their significant impact - Palantir Technologies (PLTR) and Alibaba Group Holding (BABA). While both companies have carved their own paths, their financial profiles and growth prospects differ markedly.

Growth

Palantir, with its focus on data analytics and AI, has shown impressive growth. In Q2 2025, Palantir's revenue surged 48% year-over-year, with U.S. revenue growing 68% and US commercial revenue up 85%. The company also raised its full-year 2025 revenue guidance to +45% growth [3][1]. Alibaba, while much larger, has faced challenges and its growth has been more moderate. Its shares have declined nearly 60% since 2020, indicating slower growth or investor concerns [2][4].

Profitability

When it comes to profitability, Palantir outshines Alibaba. Palantir boasts a profit margin of 18.3%, compared to Alibaba's 13.1%. Palantir has also reported adjusted income from operations guidance of about $493-497 million for Q3 2025 [1][2].

Scale and Valuation

Alibaba's revenue and profits dwarf Palantir's, with Alibaba generating nearly $1 trillion in revenue and $129.5 billion in earnings over the last 12 months, compared to Palantir’s $3.12 billion revenue and $571 million earnings [2]. Alibaba’s valuation is currently more attractive on traditional metrics, partly due to regulatory and macroeconomic concerns in China affecting its stock price [2].

Return On Equity (ROE)

Palantir has a slightly higher ROE at 12.36% compared to 11.44% for Alibaba, showing efficient use of shareholder equity [2].

Long-Term Prospects

Palantir offers a compelling long-term growth story with robust revenue growth, improving profitability, and strong profit margins driven by its AI and data analytics business. However, it operates at a smaller scale and higher valuation. Alibaba, on the other hand, offers a vast ecosystem and scale, with more stable but slower growth and a more attractive valuation, though it faces geopolitical and regulatory risks that have pressured its stock [2][3][4].

For long-term AI-focused growth, Palantir appears more attractive. However, for those seeking a diversified tech giant exposure with a cheaper valuation but slower growth prospects, Alibaba may be the choice [2][3][4]. The decision ultimately depends on investor preference for growth versus scale and risk tolerance.

Additional Developments

Amidst this comparison, it's worth noting that Alibaba plans to launch AI glasses to compete against Meta [5]. Meanwhile, Wedbush analyst Dan Ives believes that Palantir's market cap will hit $1 trillion within the next two to three years [6]. Furthermore, Palantir's share price has skyrocketed 1,560% since its initial public offering in 2020, while Alibaba's cash position is a staggering $428 billion, compared to Palantir's $5.4 billion [2].

[1] Palantir Technologies Q2 2025 Earnings Report [2] Alibaba Group Holding Q2 2025 Earnings Report [3] Palantir Technologies Raises Full-Year Revenue Guidance [4] Alibaba Group Holding Shares Plunge Nearly 60% Since 2020 [5] Alibaba to Launch AI Glasses to Compete Against Meta [6] Wedbush Analyst Predicts Palantir's Market Cap to Reach $1 Trillion in the Next Two to Three Years

1. Investors who are focused on AI-centric long-term growth may find Palantir Technologies (PLTR) an attractive choice, given its impressive revenue growth, improving profitability, and robust profit margins in the field of data analytics and AI.
2. On the flip side, Alibaba Group Holding (BABA), despite facing challenges and slower growth, offers a vast ecosystem and scale, along with a more stable but moderate growth trajectory and a more attractive valuation compared to Palantir, albeit with geopolitical and regulatory risks to consider.
3. For those seeking diversified exposure to the tech industry with a lower valuation but slower growth prospects, Alibaba may be the choice, while investors who are willing to accept higher risk for the potential of higher returns and a growth-focused approach may find Palantir more appealing.

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