Key points
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AI stocks took a hit in 2026, creating an opportunity to pick up shares of Palantir Technologies and Oracle at a discount.
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Palantir and Oracle are capitalizing on AI-driven customer demand for their offerings.
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Both have drawbacks, such as Palantir’s high stock valuation and Oracle’s mounting debt.
The artificial intelligence (AI) sector saw turmoil in 2026. Wall Street was hit with a lot of AI stocks, but this creates opportunities for investors who take a long-term view.
There are two AI companies to invest in Palantir Technologies (NASDAQ:PLTR) And Oracle (NYSE: ORCL). The former rose to prominence by providing data analytics to government intelligence agencies, while the latter started as a database provider that grew into a major AI cloud computing company.
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Shares of Palantir are down 20% this year in the week ending March 27. Oracle fell almost 30% during that time. This creates a buying opportunity, but if you have to choose between the two, here’s a look at which is the better AI investment.
The letters “AI” are written on a digital cloud floating above the circuits.
Image source: Getty Images.
Palantir’s AI platform
Palantir launched its Artificial Intelligence Platform (AIP) in 2023, and it was a hit, as evidenced by the company’s blistering revenue growth. In the fourth quarter of 2025, Palantir posted an impressive 70% year-over-year revenue increase to $1.4 billion.
The company’s AI solutions have several strengths. The platform is built to protect sensitive information given the needs of government agencies. It is also powerful enough to support military operations and help Ukraine in its war against Russia and the US in its conflict with Iran.
Palantir’s competitive advantage lies in the proprietary ontology used by its AI models. CEO Alex Karp explained the importance, stating in a February letter to shareholders: “The models need to be tethered to objects in the real world, and it is that bond, that means of grounding and orientation, that we have built.”
However, Palantir’s success has catapulted the stock to a sky-high valuation, as evidenced by its price-to-sales ratio (P/S ratio) of 82. This suggests that the stock is expensive.
The pros and cons of Oracle
Oracle’s move to cloud infrastructure allowed it to become a provider of AI computing capacity. This is a lucrative new market. As companies like OpenAI and Palantir rush to build ever more powerful artificial intelligence, they need enormous computing power. And it just so happens that Palantir is one of Oracle’s cloud customers.
As a result, Oracle’s sales are going strong. Revenue in the third quarter of 2026 ending February 28 rose 22% year over year to 17.2 billion, and this growth is expected to continue. Fiscal third quarter remaining performance obligations (RPO), which represent the future revenue Oracle expects from its customer contracts, totaled $553 billion, a staggering 325% increase year over year.
However, the AI infrastructure is expensive. Oracle had to rack up debt to finance its cloud expansion. The country ended the third fiscal year with more than $130 billion in debt and announced plans in February to raise up to $50 billion through debt and equity financing.
Choose between Palantir and Oracle
With both companies generating strong AI-driven sales, how can an investor choose between the two companies? One consideration is stock valuation. While Palantir’s sales multiple of 82 is high, Oracle looks cheap in comparison.
ORCL PS Ratio Chart
Data per YCharts.
In fact, Oracle’s price-to-earnings ratio is near record lows over the past year, suggesting now is a good time to pick up shares.
However, Oracle’s growing debt load is a concern, while Palantir has an impressive balance sheet. At the end of 2025, Palantir’s total assets were $8.9 billion, compared to total liabilities of $1.4 billion and no debt.
Given Palantir’s stronger revenue growth and financial health, this is the better AI investment over Oracle. However, share price appreciation is a concern, so try to buy during a dip.
Should You Buy Palantir Technologies Stock Now?
Consider the following before purchasing shares in Palantir Technologies:
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Robert Izquierdo holds positions at Oracle and Palantir Technologies. The Motley Fool holds positions in and recommends Oracle and Palantir Technologies. The Motley Fool has a disclosure policy.
