Image source: Getty Images <\/p>\n
Artificial intelligence (AI) stock Palantir is absolutely crushing it right now. Year to date, it\u2019s up about 150%. Looking ahead, the stock could continue to rise as the company\u2019s generating unbelievable growth. However, right now, Wall Street analysts see more potential in these other two AI stocks over the medium term.<\/p>\n
Software company ServiceNow (NYSE: NOW) looks set to be a key player in the AI revolution. That\u2019s because it offers a platform designed to help enterprises deploy AI across a range of business areas including IT, human resources, customer relationship management, and risk and security.<\/p>\n
Today, this platform is used by 85% of the Fortune 500. So the company\u2019s in a really strong position to offer innovative solutions such as AI agents (which it has already introduced).<\/p>\n
Now, this stock currently trades for $853. However, the average analyst price target is $1,146. That translates to potential gains of 34%.<\/p>\n
Going back to Palantir, the average price target there is 17% below the current share price.<\/p>\n
Thanks to high demand for its AI tools, ServiceNow is currently having a lot of success. In July, for example, it reported Q2 revenue growth of 22.5% and raised its annual revenue guidance.<\/p>\n
However, the stock isn\u2019t a Buy for me right now. In my view, it\u2019s just a little bit expensive at its current price-to-earnings (P\/E) ratio of 51. That multiple doesn\u2019t leave any room for a mis-step, to my mind. For example, a slowdown in revenue growth could lead to a downward valuation re-rating.<\/p>\n
I\u2019m keen to own this stock in the future though. I\u2019m hoping the valuation comes down in the next market pullback and I can snap up the stock at a more favourable price.<\/p>\n
Another software company that looks set to be a major player in the AI boom is Salesforce (NYSE: CRM). Like ServiceNow, it\u2019s recently been rolling out agentic AI solutions (Agentforce), designed to help businesses increase productivity.<\/p>\n
I think it\u2019s well positioned to have success here. That\u2019s because its software is used by 150,000 businesses worldwide meaning that it already has relationships with firms and doesn\u2019t need to start the sales process from scratch.<\/p>\n
This stock currently trades for $232. However, the average analyst price target is $354. That\u2019s a whopping 53% higher than the current share price. So clearly analysts see a lot of potential here.<\/p>\n
I reckon there\u2019s potential too. As a result, I\u2019ve been buying the stock for my portfolio.<\/p>\n
Currently, the forward-looking P\/E ratio here is only 21. I see a lot of value at that earnings multiple.<\/p>\n
I will point out that analysts at Melius Research have warned that AI could hurt software businesses because automation will reduce the number of \u2018seats\u2019 they can charge companies for. This is a risk to think about.<\/p>\n
I like the risk-reward proposition at current levels however. In my view, this tech stock\u2019s worth considering today.<\/p>\n
The post These 2 AI stocks will outperform Palantir over the next year, according to analysts<\/a> appeared first on The Motley Fool UK<\/a>.<\/p>\n More reading<\/p>\n Edward Sheldon has positions in Salesforce. The Motley Fool UK has recommended Salesforce and ServiceNow. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.<\/a><\/p>\n Motley Fool UK 2025<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images Artificial intelligence (AI) stock Palantir is absolutely crushing it right now. Year to date,…\n","protected":false},"author":2,"featured_media":72543,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[554,37314,37317,733,4308,37313,37316,2044,37315,86,56,54,55],"class_list":["post-72542","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-ai-revolution","tag-analysts","tag-artificial-intelligence","tag-artificialintelligence","tag-palantir","tag-price-target","tag-revenue-growth","tag-servicenow","tag-technology","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/72542","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=72542"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/72542\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/72543"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=72542"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=72542"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=72542"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}