Prediction: 2 AI Stocks Will Be Worth More Than Palantir Technologies in 5 Years

Palantir Technologies stock has nearly doubled over the past year, bringing its market value to $360 billion. I think Shopify (NASDAQ: SHOP) and AppLovin (NASDAQ: APP) can top that figure within five years. Here's what that would mean for shareholders:

• Shopify is currently worth $172 billion. The stock must increase 110% to achieve a market value of $361 billion. If that happens in five years, the implied return is about 16% annually.
• AppLovin is currently worth $160 billion. The stock must increase 126% to attain a market value of $361 billion. If that happens in five years, the implied return is about 18% annually.

Here's what investors should know about these artificial intelligence stocks.

Image source: Getty Images.

1. Shopify

Shopify develops commerce software that serves as a centralized dashboard from which merchants can manage sales across physical and digital stores, including social media, online marketplaces, and custom websites. The company supplements its core software with adjacent solutions for marketing, payments, and logistics.

Consultancy Gartner recently recognized Shopify as a leader in digital commerce, listing rapid innovation, enterprise-grade reliability, and support for businesses of all sizes as important strengths. Indeed, Shopify is gaining traction with enterprise customers because of its introduction of more sophisticated features such as advanced analytics, deeply customizable storefronts, and wholesale commerce tools.

Shopify is well positioned to benefit from artificial intelligence. The company worked with Alphabet's Google to co-develop the Universal Commerce Protocol, an open standard that integrates merchant product catalogs into AI agents such as Gemini and ChatGPT. Since January 2025, orders from AI search have soared fifteenfold.

Meanwhile, Shopify has also introduced AI features that automate store building, marketing, and back office management. During the three-week period following the last update, the company's AI assistant, Sidekick, generated about 4,000 applications, created more than 29,000 automations, built nearly 355,000 task lists, and edited 1.2 million photos, according to President Harley Finkelstein.

Shopify reported strong financial results in 2025. Sales increased 30% to $11.5 billion, an acceleration from 26% in the previous year, as the company continued to gain market share. Meanwhile, operating income increased 37% to $1.5 billion.

Here's how Shopify could top Palantir's current market value within five years: Wall Street expects earnings to increase at 28% annually through 2027. That makes the current valuation of 91 times earnings look rather expensive. But if Shopify's earnings increase at 28% annually over the next five years, its market value can reach $362 billion while the valuation drops to a more reasonable 56 times earnings.

2. AppLovin

AppLovin develops ad tech software. The company initially focused on the mobile gaming industry, where it helped developers market and monetize applications. But the company recently expanded into web-based advertising with its new self-service platform, which will eventually automate every workflow from campaign creation to optimization.

AppLovin has differentiated itself with Axon, a "best-in-class machine learning ad engine," according to Morgan Stanley. Axon excels at targeting campaigns because AppLovin also owns a mediation platform called Max, which lets publishers sell inventory across multiple ad networks. Data gathered from that process is used to train the artificial intelligence models that power Axon.

Indeed, AppLovin delivers a 45% higher return on ad spending than Meta Platforms, and a 115% higher return on ad spending than secondary platforms such as TikTok, Pinterest, Snap's Snapchat, and Alphabet's YouTube, according to marketing attribution company Northbeam. For that reason, Mark Giarelli at Morningstar says Axon affords AppLovin a durable competitive advantage.

AppLovin reported strong financial results in 2025. Advertising revenue increased 70% to $5.4 billion, and net income from continuing operations (i.e., excluding the mobile gaming unit the company sold in June 2025) increased 116% to $3.4 billion.

Here's how AppLovin could top Palantir's current valuation within five years: Wall Street expects the company's earnings will increase at 44% annually through 2027, which makes the current valuation of 49 times earnings look reasonable. But even if AppLovin's earnings increase at a more conservative pace of 30% annually over the next five years, its market value can reach $365 billion while the valuation falls to 30 times earnings.

Trevor Jennewine has positions in Palantir Technologies and Shopify. The Motley Fool has positions in and recommends Alphabet, Palantir Technologies, Pinterest, and Shopify. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.