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Investors looking for top growth stocks to buy are increasingly looking at AI and other hyper growth catalysts as key reasons to enter positions in top names. We've all seen that the vast majority of headlines lately have been dominated by the likes of Nvidia ( NASDAQ: NVDA ), which briefly held the mantle as the world's largest company by market capitalization on this trend alone.
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- Oracle's partnership with Tesla could elevate the company's position in the AI arms race.
However, there are plenty of other growth stocks to consider that are considered to be excellent ways to play the AI trend. Whether you view Palantir ( NYSE: PLTR ) or Oracle (NYSE: ORCL) as pure-plays on AI or AI-adjacent stocks, it really doesn't matter. Both companies certainly provide investors with exposure to AI via these companies' recent integrations and partnerships.
Let's dive into which of these two top high-growth stocks may be better bets in this current macro backdrop.
Palantir
Palantir logo on a smartphone overlayed on top of a market chart.
Big data analytics company Palantir has certainly seen strong performance of late. On a year-to-date basis, PLTR stock is up nearly 60% at the time of writing, and appears to be making a move toward a fresh 52-week high. While this stock is still down from its 2021 peak, most growth stocks are. But it's clear many investors are now pricing in some strong forward momentum into this name, with its recent AI integrations and product offerings providing investors plenty to be excited about.
Most notably, Palantir announced a number of new products and updates to its core platform in its annual user conference, Palantir Forward. The company put forward enhancements it its core machine learning, data integration and user interface capabilities for its platform, promoting its AI solutions to customers looking to more quickly and easily parse data and detect and respond to cyber threats.
Palantir's recent strong performance has been tied to excellent results, with the company reporting revenue growth of 20%, and profit growth coming in at a whopping 200% during the last quarter of 2023. If the company can continue to grow at this pace, or slightly higher (given the emphasis on its AI offerings), it's possible that operating leverage and multiple expansion could see this stock head much higher. Of course, that's based on a number of rosy assumptions, with the company's current valuation of more than $57 billion factoring in plenty of growth.
The question is whether the company's core defense business and government contracts will eventually give way to greater commercial contracts over time. The growth Palantir has seen of late has been driven by this segment, but that's not why many investors got involved in this stock to begin with. Alas, investors are now stuck between viewing this stock as a defensive gem, or a company that's a hyper-growth play. And while it's possible for the company to hold some semblance of both, that's where the cognitive dissonance kicks in for many investors.
Oracle
Photo of an Oracle building
Oracle probably wouldn't be the first company most investors think of when they search for AI stocks to buy. The cloud giant provides a range of software solutions and applications to enterprise clients, with a focus on providing enterprise resource planning, supply chain, manufacturing and other database-related software products suited for specific industries.
However, the comp has been increasingly focused on integrating artificial intelligence into its business model. Oracle has recently partnered with major companies such as Tesla ( NASDAQ: TSLA ) to build super computers that will be in operation by the end of 2025. This is a big undertaking, with xAI CEO Elon Musk touting this endeavor as important of the future of humanity.
The idea is to create a so-called "gigafactory of compute," which will enable a connected group of chips to perform lightning-fast tasks. If this model is successful, Oracle could certainly be elevated in its perception from its existing enterprise clientele base to develop similar solutions, creating some positive network effects over time.
It's my view that this potential catalyst is one worth considering. Elon Musk may be a polarizing figure, but his stance on various modern technologies is one that investors clearly still view positively. We'll have to see how this integration goes, and what sort of growth Oracle can glean from this partnership and others. But if I had to choose between the two companies, Oracle would likely be my preferred pick due to its relatively more attractive valuation and its stronger growth prospects long-term.
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