This Artificial Intelligence (AI) Stock Has Outperformed Palantir in 2025. Is It Still a Buy?

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At present, many investors might agree that Palantir Technologies (NASDAQ: PLTR) is the top pick among stocks. I concur with their choice as well.

It’s indisputable that Palantir is currently one of the most sought-after stocks on the exchange. Notably, it leads the pack in terms of growth within the S&P 500 (SNPINDEX: ^GSPC) this year, nearly doubling its value from January to the market close on July 15. However, another AI stock has managed to outshine Palantir’s performance so far.

Bringing AI to the warehouse

Despite Palantir’s significant heat, Symbotic (SYM) has been scorching hot – at least in terms of 2025 so far. The shares of the AI-driven supply chain robotics firm have surged approximately 105%, outperforming Palantir’s 95% growth.

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In the year 2007, Rick Cohen established Symbotic with a mission in mind. This mission stemmed from his personal observations of logistical issues at his relatives’ company, C&S Wholesale Grocers – America’s largest wholesale grocery provider.

Symbotic’s tech streamlines the handling of pallets and boxes. Their self-governing mobile robots, known as Symbots, navigate through Symbotic’s exclusive warehouses, transporting goods around the company. These Symbots are guided by artificial intelligence created by Symbotic.

The company boasts a notable list of clients, with retail behemoth Walmart (NYSE: WMT) being its biggest customer, contributing around 87% of its income during the previous fiscal year. Interestingly, Walmart is also one of Symbotic’s investors. Other significant clients include Greenbox, a collaboration between Symbotic and SoftBank (OTC: SFTB.Y), Albertsons (NYSE: ACI), C&S Wholesale Grocers, and Target (NYSE: TGT).

Behind Symbotic’s spectacular performance

In Q2 of the fiscal year 2025, Symbotic experienced a 40% increase in earnings compared to the same period last year. This growth rate is slightly more than what Palantir achieved in its most recent quarter. However, unlike Palantir, Symbotic currently operates at a loss.

It’s likely that numerous investors are enthused by Symbotic’s substantial increase in gross margin, mainly because they have completed eight projects with lower profitability margins.

It’s hard not to be amazed by Symbotic’s almost $23 billion worth of pending projects. What makes it even more promising is that this backlog keeps expanding, indicating a promising outlook for the company’s future.

A significant stride for Symbotic took place in January 2025 with their acquisition of Walmart’s Advanced Systems and Robotics (ASR) business. This move grants Symbotic entry into the micro-fulfillment market, where small fulfillment centers close to customers are utilized to speed up order processing and reduce delivery times. Estimates suggest that this acquisition expands Symbotic’s potential market in the U.S. by over $300 billion.

Is Symbotic stock still a buy?

Is this high-flying AI stock still a buy? I think the answer is “yes” for long-term investors.

It’s worth noting that some on Wall Street might consider Symbotic stock to be overvalued, given that their average 12-month price forecast is around 30% lower than its current market value. However, I believe this could largely be due to the rapid surge in Symbotic’s share price. Out of the 19 analysts surveyed by LSEG in July, two rated it as a “strong buy” and nine considered it a “buy.

In other words, it might be that certain investors express apprehension over Symbotic’s evaluation, given that its shares are exchanged at approximately 238 times projected future earnings. Nonetheless, this is lower than Palantir’s forward earnings multiple of 263. It’s worth noting, though, that traditional earnings-focused measurements may not be as pertinent for Symbotic at the moment. However, Symbotic’s price-to-sales ratio of 2.4 appears quite reasonable (especially in contrast to Palantir’s price-to-sales ratio of 119.)

Symbotic’s potential market size, factoring in the Walmart ASR acquisition, surpasses $1.2 trillion. The company’s technology provides it a competitive advantage in securing a significant portion of this vast market. Additionally, its partnership with Walmart and other influential retail and wholesale leaders serves as a strategic advantage.

There’s uncertainty about whether Symbotic’s current growth trajectory can be maintained, but I foresee it remaining a successful investment for the coming decade and beyond. Symbotic may not currently enjoy the popularity of Palantir, but it might well deserve that recognition.

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2025-07-17 16:59