Could This Artificial Intelligence (AI) Stock Be the Next Palantir?

Palantir Technologies has become one of the most valuable tech companies in the world due to its advanced data analytics and artificial intelligence (AI) capabilities, which have been in high demand. Its close relationship with governments around the world has led to terrific growth for the business.

One stock that's far smaller but might have plenty of upside for similar reasons is Swarmer (NASDAQ: SWMR), which recently went public. The company makes drone software that leverages AI, which can be crucial in warfare. Its shares have approximately tripled from the $12.50 they opened at on March 17, as retail investors appear to be extremely bullish about its long-term prospects.

Could the stock follow in the footsteps of Palantir and be the next hot AI stock to own?

Image source: Getty Images.

Why Swarmer's stock may continue to rally

Swarmer is involved with drones, but rather than manufacturing them, it helps control them with software. It can help them work together as an efficient and coherent force. What makes Swarmer stand out is that its software is battle-tested, with the company claiming it has supported over 100,000 missions in Ukraine.

There is massive potential for Swarmer, which is why it could make for a compelling stock to own. While its sales declined in 2025 and totaled just $309,920, the company has a backlog totaling $16.3 million, which could flow through to its top line within the next couple of years. And there's another $16.8 million that it may be able to add on top of that, potentially turning this into a growth beast in the not-too-distant future.

Has the stock gotten too hot to buy?

Swarmer's software could be in high demand from government customers, potentially making it the newest hot tech stock in the space. It remains unprofitable (it incurred an $8.5 million loss last year) and still has a long way to go before proving it can be the next Palantir, but it certainly has plenty of room to grow. Currently, its market cap is around $470 million.

At this stage, however, the company still has a lot to prove, and there's plenty of risk that comes with the stock. Its incredible rally is exciting, but it could also make it vulnerable to a correction and sell-off if investor sentiment shifts. Plus, it's important to consider that there's plenty of competition in the space -- Swarmer may have a good track record, but whether it has a defendable competitive advantage is still a big question mark.

Ultimately, unless you have a high tolerance for risk and can stomach the inevitable volatility that may come with the stock, you may want to keep Swarmer on a watch list, rather than investing in it today.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.