Got $5,000? 2 Brilliant Tech Stocks to Buy and Hold for the Long Term

Key Points

• Palantir’s AIP is fast becoming the foundational software in the enterprise AI market.

• Alphabet’s full-stack AI approach is proving to be a key competitive advantage.

• 10 stocks we like better than Palantir Technologies ›

The U.S. economy seems to be battling a slowdown this September. Job growth slowed to just 22,000 in August 2025, while the Consumer Price Index climbed 2.9% year over year, up from 2.7% in July. Despite sticky inflation, Wall Street now expects the Federal Reserve to prioritize economic growth and start cutting interest rates. Lower borrowing costs make it easier for companies to invest and expand, often lifting valuations for high-growth technology stocks.

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If you have $5,000 not required to pay bills or for other contingencies, then investing in these two stocks can prove to be an exceptionally strong move in the long run.

1. Palantir Technologies

Palantir (NASDAQ: PLTR) has positioned itself as a prominent enterprise AI software player, helping organizations deploy production-grade AI applications at scale. The company's rapid growth momentum highlights how crucial Palantir's platforms are becoming to enterprises globally.

In the second quarter of 2025 (ended June 30), Palantir's revenues soared 48% year over year to over $1 billion. The company's adjusted operating margin was a solid 46%, and adjusted free cash flow was $569 million.

Palantir's U.S. business is a key driver of this growth. In the second quarter, U.S. revenues climbed 68% year over year to $733 million, with U.S. commercial revenue surging 93% to $306 million and U.S. government revenues jumping up 53% to $426 million. Customer count is also picking up pace, and was up 43% year over year to 849. Palantir is also seeing increasing and deeper adoption from high-value clients. This is evident considering that its top 20 customers generated an average of $75 million in revenue each in the last 12 months, up 30% year over year.

Palantir's Artificial Intelligence Platform (AIP) is fast becoming the operating system for enterprise AI. Instead of assembling generic cloud parts, clients are opting for AIP's ready-made software blocks to design, develop, and deploy production-ready AI-powered applications. This shift is helping them speed up production rollout, automate tasks, and shorten time to results.

Palantir's focus on ontology (a framework relating an organization's digital assets, such as data, software, and workflows, with physical counterparts) enables clients to move rapidly and meaningfully leverage large language model capabilities in production systems.

The company's recently introduced AI Function-Driven Engineering (FDE) capability within its AIP platform can also prove to be a major step forward in the rapidly evolving agentic AI space. AI FDE can help clients autonomously handle tasks like creating and editing the ontology, performing complex data manipulations, debugging issues, and assembling applications. It also runs with closed-loop error handling and informs humans if needed.

All those competitive advantages are translating into results: Palantir booked $2.3 billion in total contract value in the second quarter, including 157 deals worth $1 million or more.

Palantir trades at over 277 times forward earnings, which is exceptionally rich. However, many technology companies, such as Amazon and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), have been known to trade at lofty valuations in early stages of growth. Yet long-term investors benefited from picking stakes in those stocks even at those levels.

Similarly, with accelerating demand for its offerings, a sticky customer base, and a powerful competitive moat around ontology, Palantir can prove to be a smart pick -- despite its elevated valuation levels.

2. Alphabet

Alphabet remains a dominant force in online search, video, and cloud computing. However, now it is investing heavily into AI infrastructure, models, and agentic systems to drive its next phase of growth.

In the second quarter of fiscal 2025 (ending June 30), revenues grew 14% year over year to $96.4 billion, while net income jumped 19% year over year to $28.2 billion. The company also generated $66.7 billion of free cash flow in the 12 months ending the second quarter. Alphabet's core business remains strong and cash-rich, giving it the flexibility to invest in AI and cloud innovations.

Google Cloud is a key growth catalyst, accounting for a 13% share of the global cloud infrastructure market in the second quarter of 2025. The business reached $50 billion annualized run rate at the end of the second quarter. In the second quarter, Google Cloud's operating margin also increased from 11.3% to 20.7% year over year. The business' backlog (contracted revenue pipeline) soared 38% year over year to $106 billion, which implies impressive revenue visibility for several years in future.

Alphabet's full-stack AI approach is playing a critical role in attracting new customers, deepening relationships with existing customers, and expanding overall addressable market. The company has built a robust AI infrastructure, comprising a broad network of AI-optimized data centers and cloud regions on Google Cloud. These are supported by custom TPUs, GPUs, and optimized networking and storage solutions. Alphabet also offers an exceptional portfolio of AI models and tools, including the Gemini 2.5 family of hybrid reasoning models, Veo 3 state-of-the-art video generation model, and an AI filmmaking tool, Flow -- largely hosted and operated on Google Cloud. Finally, the company has integrated AI capabilities in several of its offerings, such as Search, Workspace, and Chrome.

Alphabet's strategy of integrating AI in its flagship Google Search is already showing results. Search usage has increased due to features such as AI Overviews, AI Mode, Lens, and Circle to Search -- offering users new ways to access information. These features have especially resonated with younger users and for longer and more complex queries.

Alphabet is investing heavily in data centers, servers, and power to meet the rising demand. While near-term depreciation will increase, improving cost efficiencies and scale will offset these headwinds.

Alphabet trades at nearly 26 times earnings, reasonable for a platform with this breadth, cash generation, and AI moat, making it a worthwhile pick for smart long-term investors.

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Manali Pradhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Palantir Technologies. The Motley Fool has a disclosure policy.