Few businesses have reaped the rewards of the artificial intelligence (AI) boom quite like Palantir Technologies ( PLTR -0.98%). What began as a specialized government contractor has transformed into a major force in the enterprise software sector. Its Artificial Intelligence Platform (AIP) now serves as a crucial digital backbone for both public sector agencies and leading private corporations.
In the last three years, the stock price of this data analytics company has skyrocketed over 2,000%, pushing its market value past $400 billion—surpassing Salesforce, Adobe, and SAP.
However, history suggests that such explosive growth phases eventually slow down. Looking ahead five years, I believe two very different businesses could quietly overtake Palantir in terms of market capitalization: One is a retail giant poised to gain from a recovery in housing and infrastructure investment, while the other is a chipmaker striving to lead the next generation of AI hardware.
Home Depot may benefit from the next economic upturn
While Palantir represents the digital core of AI, Home Depot ( HD -0.17%) stands for its physical foundation. After years of restrictive monetary policy and a return to more typical interest rates, home affordability has dropped to its lowest point in decades. But with expectations that rates will slowly fall, a wave of delayed home purchases and a boom in renovation spending could be unleashed. Home Depot’s vast scale, investments in digital logistics, and strong customer loyalty give it lasting advantages that should serve it well as the market cycle shifts.
Additionally, the company is well-placed to benefit from a less obvious trend: the $7 trillion investment in AI-related infrastructure. Massive projects like the Stargate data center are driving a surge in industrial and commercial construction. From electrical and HVAC systems to specialized building materials and skilled trades, Home Depot is at the heart of this transformation.
Home Depot’s unique position in both residential and commercial markets makes it a hidden gem in the infrastructure sector. With the potential for stock appreciation and a history of steady dividend increases, the company could deliver strong long-term returns for shareholders. Its valuation may see significant growth in the coming years.
HD Dividend data by YCharts.
AMD is becoming Nvidia’s top competitor
During the AI surge, Advanced Micro Devices ( AMD -1.70%) has often been seen as playing second fiddle to Nvidia. That view, however, is starting to change.
Leading cloud providers like Microsoft and Oracle, along with tech giants such as Meta Platforms and OpenAI, are increasingly incorporating AMD’s MI300 and MI400 GPUs into their data centers to lessen their reliance on Nvidia’s products. As AI workloads become more demanding, these companies are quickly adopting multi-platform strategies to boost flexibility and reduce supply chain vulnerabilities.
This move toward diversification not only helps them avoid operational slowdowns and pricing pressure from Nvidia, but also positions AMD as a key player in the next phase of AI infrastructure development.
Image source: AMD.
Innovation takes many shapes
Palantir’s ascent is a remarkable story within the larger AI landscape, but its valuation may be nearing its ceiling. Over the next five years, the greatest opportunities could belong to investors who look beyond the obvious choices and focus on the companies providing the essential tools for economic growth.
Home Depot is set to gain from increased industrial investment and a resurgence in home construction. At the same time, AMD has established itself as a vital supplier of AI computing chips, intensifying its competition with Nvidia as demand for advanced processors from cloud giants continues to soar.
Although Palantir has built a formidable presence by connecting data and software intelligence, history often rewards those companies that lay the groundwork for broader waves of innovation. That’s why both Home Depot and AMD could potentially surpass Palantir in value by 2030.
