Growth Stocks Rebound: Palantir and GitLab Stand Out

Investors eye Palantir and GitLab as promising growth stocks. With Palantir's robust AI platform and GitLab's impressive revenue growth, both companies present enticing opportunities for future gains despite some market uncertainties.

Date: 31-03-2025

AI Rating: 7

Company Overview
Palantir Technologies and GitLab represent two significant opportunities in the tech sector, each with unique strengths and prospects.
Palantir Technologies (PLTR)
Palantir is trading at a forward price-to-sales ratio of 60, which may deter some value-conscious investors, yet its growth story is compelling. The company has seen a 43% year-over-year increase in commercial customers, driven primarily by its Artificial Intelligence Platform (AIP). Additionally, the company is transitioning from proof-of-concept initiatives into full-scale implementations of AI solutions for existing clients. However, caution is warranted due to potential budget cuts from the Department of Defense, its largest customer, which could impact revenue. Overall, Palantir presents a strong growth narrative, albeit with some immediate uncertainties.
GitLab (GTLB)
GitLab, on the other hand, is trading at a more reasonable forward P/S multiple of just over 9 and has demonstrated impressive revenue growth, achieving increases of 29% to 33% in the past six quarters. The company has a high gross margin and a solid free cash flow profile, highlighting its operational efficiency. The net revenue retention rate of 123% indicates that existing customers are expanded their engagement substantially, which is a massive positive sign. Strong endorsements from analysts further bolster GitLab's outlook. As the company expands its AI capabilities, bringing in significant customer growth, the potential for future upside remains high.
Investment Considerations
From an investor's perspective, both stocks present enticing opportunities, particularly in light of the growth potential in the AI space. Palantir's pivot to AI as an operating system poses a unique market advantage, while GitLab's combination of strong financial metrics and customer growth makes it an attractive option.
Overall, while there are risks associated with federal spending for Palantir, the underlying technology and market potential create optimism for both companies as investment prospects.

Stocks: PLTR GTLB