Better Artificial Intelligence Stock: Palantir vs. Oracle

The artificial intelligence (AI) industry experienced upheaval in 2026. Wall Street soured on many AI stocks, but this creates opportunities for investors looking at the long term.

Two AI businesses to consider investing in are Palantir Technologies (NASDAQ: PLTR) and Oracle (NYSE: ORCL). The former gained prominence providing data analytics to government intelligence agencies, while the latter began as a database provider that became a major AI cloud computing company.

Palantir shares are down 20% this year through the week ending March 27. Oracle dropped nearly 30% in that time. This creates a buying opportunity, but if you had to choose between the two, here's a look at which is the better AI investment.

Palantir's AI platform

Palantir launched its Artificial Intelligence Platform (AIP) in 2023, and it's been a hit, as demonstrated by the company's blistering sales 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 boast several strengths. Its platform was built to protect sensitive information, given the needs of government agencies. It's also powerful enough to support military operations, aiding Ukraine in its war against Russia and the U.S. in the 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 must be tethered to objects in the real world, and it is that tether, that means of grounding and orientation, that we have built."

However, Palantir's success has catapulted its stock to a sky-high valuation, as evidenced by its price-to-sales ratio (P/S ratio) of 82. This suggests the stock is expensive.

Oracle's pros and cons

Oracle's move into cloud infrastructure positioned it to become a provider of AI computing capacity. This is a lucrative new market. As businesses like OpenAI and Palantir rush to build increasingly powerful artificial intelligence, they require massive 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 its fiscal Q3 2026, ended Feb. 28, rose 22% year over year to 17.2 billion, and this growth is poised to continue. Its fiscal Q3 remaining performance obligations (RPO), representing future revenue Oracle expects from its customer contracts, totaled $553 billion, a staggering 325% year-over-year increase.

However, AI infrastructure is costly. Oracle had to pile up on debt to fund cloud expansion. It exited fiscal Q3 with over $130 billion in debt, and in February, announced plans to raise up to $50 billion dollars through debt and equity financing.

Choosing between Palantir and Oracle

With both companies producing strong AI-driven sales, how can an investor choose between them? One consideration is stock valuation. While Palantir's sales multiple of 82 is high, Oracle looks cheap by comparison.

Data by YCharts.

In fact, Oracle's P/S ratio is near a low point over the past year, suggesting now is a good time to pick up shares.

However, Oracle's growing debt is a concern, while Palantir sports 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 sales growth and financial health, it is the better AI investment over Oracle. Its share price valuation is a concern, though, so try to buy on a dip.

Robert Izquierdo has positions in Oracle and Palantir Technologies. The Motley Fool has positions in and recommends Oracle and Palantir Technologies. The Motley Fool has a disclosure policy.