Here's Where Palantir and 4 Other AI Software Stocks Could Be in 5 Years | The Motley Fool

Artificial intelligence (AI) software stocks have split into two camps this year: companies proving AI actually shows up in their revenue, and companies still asking investors to take their word for it. Palantir Technologies ( PLTR +5.17% ) and four peers, CrowdStrike ( CRWD +4.57% ) , SoundHound AI ( SOUN -2.35% ) , AppLovin ( APP -1.10% ) , and ServiceNow ( NOW +0.79% ) , each tell a different version of that story. Here's how I'd think about each one five years out. Image source: Getty Images. Palantir is the most expensive stock on this list for a reason Palantir trades around $192 a share, at roughly 75 times trailing sales , a valuation that assumes years of flawless execution. Revenue grew 93% last quarter , with U.S. commercial revenue up 149%, evidence that its AI platform, AIP, is converting into actual contracts, not just pilot programs. Bull case: Growth holds up, and the stock grows into today's multiple. Base case: Growth normalizes into the 40% to 60% range, and the stock still compounds, just more slowly. Bear case: Any real deceleration, paired with a multiple this extreme, sends the stock down hard before it ever grows into today's price. Expand NASDAQ : PLTR Palantir Technologies Premium Feature Moneyball Superscore 87 /100 Today's Change ( 5.17 %) $ 10.27 Current Price $ 209.05 Key Data Points Market Cap $478B Market cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary. Day's Range $ 198.30 - $ 209.58 52wk Range $ 106.37 - $ 209.58 Volume 37.6M Avg Vol 33.5M Gross Margin 84.80% CrowdStrike CrowdStrike trades at about 51 times sales, also a steep multiple, but one backed by $5.25 billion in annual recurring revenue (ARR) growing 24% and accelerating. Falcon Flex, its AI-driven bundling platform, hit $2.29 billion in ARR, up 101% year over year, and adoption of its AI detection tool roughly quintupled in a single quarter after an acquisition integration. Bull case: Cybersecurity spending keeps growing, and CrowdStrike keeps taking share . Also, as concerns grow about AI agents acting unpredictably, investors are looking to CrowdStrike for guidance on securing these new AI systems. Base case: Growth cools from elite to merely very good, and the stock still works. Bear case: The valuation simply has no room for a stumble. Expand NASDAQ : CRWD CrowdStrike Premium Feature Moneyball Superscore 85 /100 Today's Change ( 4.57 %) $ 12.03 Current Price $ 275.04 Key Data Points Market Cap $269B Market cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary. Day's Range $ 262.40 - $ 275.12 52wk Range $ 85.68 - $ 286.99 Volume 7.1M Avg Vol 9.6M Gross Margin 75.12% SoundHound AI SoundHound trades at around 12 times sales after a rough 2026 , and the stock is down roughly 41% even as revenue hit a record $61.9 million last quarter, up 45%. It's proof of real AI voice tech already being adopted by restaurants, automakers, and call centers. Bull case: The company turns profitable while keeping growth above 40%. Base case: Growth slows, and the stock starts trading more like a typical software company. Bear case: Continued cash burn without enough proof that the unit economics work. AppLovin AppLovin trades at around 20 times forward earnings , cheap next to the others here, despite revenue growing 59% last quarter, per Barrons. The evidence AI is working: its Axon ad-targeting engine grew 700% in a single quarter as advertisers shifted budget toward its AI-optimized placements, according to Tikr reporting. Bull case: Axon moves beyond gaming into e-commerce and keeps growing at this pace. Base case: Growth slows to the 30% to 40% range as comparisons get tougher, still a strong result. Bear case: A platform this reliant on advertiser budgets is first in line when ad spending pulls back. Expand NASDAQ : APP AppLovin Premium Feature Moneyball Superscore 78 /100 Today's Change ( -1.10 %) $ -3.08 Current Price $ 277.04 Key Data Points Market Cap $94B Market cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary. Day's Range $ 275.35 - $ 282.49 52wk Range $ 266.84 - $ 738.01 Volume 3.3M Avg Vol 5.9M Gross Margin 87.65% ServiceNow ServiceNow has lagged this group in 2026, and I get why: its AI annual contract value, while it just crossed $1 billion, according to Reuters , but that is still a small slice of a company doing tens of billions in total revenue. The stock trades around 29 times forward earnings, cheap by this group's standards, following a 5-for-1 split in December 2025 that made shares easier to buy. The reason it still belongs here: ServiceNow isn't selling AI as a bolt-on, it's embedding agentic AI into workflows enterprises already run their operations on, and production AI deployments are up ninefold in nine months. Bull case: That embedded position turns into real pricing power within two to three years. Base case: AI revenue remains a modest contributor, while the core platform continues to grow steadily. Bear case: AI software budgets consolidate toward more specialized tools , and ServiceNow's AI layer never becomes the headline growth driver investors hope for. My logic for these cases is this: ServiceNow's AI revenue is still tiny relative to its total business, so the real question over five years is whether that AI layer becomes a genuine growth driver or just rides along with the core platform without changing the trajectory much.