AI Stock Comparison: C3.ai versus Palantir - Which Performs Better?
In the rapidly evolving world of AI stocks, Palantir and C3.ai are two companies that have been making waves. While both offer innovative solutions, a closer look at their business models, growth, profitability, and valuation reveals that Palantir currently stands out as the better investment choice.
Growth: Palantir Soars Ahead
Palantir's Q2 2025 revenue surged 48% year-over-year to $1.004 billion, with commercial revenue growing an impressive 93% and securing a $10 billion contract from the U.S. Army [1][2][3][5]. In contrast, C3.ai's revenue grew 26% year-over-year to around $108 million last quarter [1][2][3]. Palantir's growth is undeniably more explosive.
Profitability: Palantir Steps Up
Though Palantir’s exact profits aren't detailed, its "Rule of 40" score of 94 indicates a strong balance of growth and profitability metrics, while C3.ai still operates at a net margin loss of around 74% and negative return on equity, signalling continuing unprofitability [2][3].
Valuation: A Matter of Perspective
Palantir trades at an extremely high price-to-sales (P/S) multiple (~110x), meaning its valuation is priced for near-perfect execution and substantial growth to justify the market cap of over $430 billion. C3.ai’s P/S multiple is far lower, about 9x recently, making it more reasonably valued but with slower growth and ongoing losses [1][2][3].
Market Performance and Sentiment: Bullish on Palantir
Palantir stock soared about 148% year-to-date in 2025, reflecting strong investor confidence, while C3.ai has stumbled with more mixed analyst opinions and less bullish momentum [4][3][5].
Business Models: Specialised Approaches
Palantir excels at processing and making sense of large unstructured datasets for government and commercial sectors, helping decision-making. C3.ai specializes in predictive AI and forecasts, particularly favoured by the U.S. military with growing but smaller contract volume [1].
In conclusion, Palantir is the better pick for investors willing to accept a very high valuation in exchange for strong growth and improving profitability. C3.ai might appeal more to those seeking a more moderately priced AI growth stock with a longer path to profitability. The decision depends on risk tolerance and valuation perspective, but as of mid-2025, Palantir’s fundamentals and stock performance make it the more compelling AI stock investment overall [1][2][3][4][5].
[1] Palantir Technologies Q2 2025 Earnings Report [2] C3.ai Q4 FY 2025 Earnings Report [3] Palantir vs C3.ai: A Comprehensive Comparison [4] Palantir Stock Price Forecast 2025 [5] C3.ai Stock Price Forecast 2025
In the sphere of AI stocks, Palantir's strong financial performance places it as a more enticing investment, with impressive growth, profitability, and valuation compared to C3.ai. Palantir's Q2 2025 revenue soared 48% YoY, reaching $1.004 billion, while C3.ai's growth was a less explosive 26% YoY. While Palantir's valuation is high with a price-to-sales multiple of ~110x, indicating a need for near-perfect execution, its notable profitability and strong investor sentiment make it a compelling choice. On the other hand, C3.ai, with a lower P/S multiple, may appeal to those seeking a more moderately priced AI growth stock. Both companies offer specialized approaches, with Palantir focusing on data-driven decision-making and C3.ai specializing in predictive AI forecasts. Ultimately, the choice boils down to investment strategy, as Palantir's fundamentals and stock performance suggest it as the superior AI stock investment overall in mid-2025.
