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Palantir or Microsoft: Gregg Moskowitz Picks His Top AI Stock Bet

Palantir or Microsoft: Gregg Moskowitz Picks His Top AI Stock Bet

Wall Street loves a good theme. It gives investors a narrative to rally behind, a lens through which to interpret the noise of the markets, and often a reason to justify outsized valuations. Over the years, we’ve seen this play out with everything from dotcoms and clean energy to crypto and EVs.

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For some time now, the dominant theme has been AI. It’s viewed as a driver of growth across industries –from software and semiconductors to healthcare and finance. Unlike trends that fizzle out, AI is already delivering tangible results, which only bolsters investor confidence. For Wall Street, that combination of early success and long-term potential is exactly the kind of story it loves to bet on.

But not every company riding the AI wave is a solid investment. Some are better positioned to benefit than others, and a few may have already run up so much that they’re no longer viable options.

Sifting through the AI landscape, Mizuho analyst Gregg Moskowitz has zeroed in on two of the most talked-about names: Palantir (NASDAQ:PLTR) and Microsoft (NASDAQ:MSFT). And right now, he sees one as offering a much more compelling opportunity than the other.

Let’s take a look at which AI giant stands out, and with some help from the TipRanks database, we’ll also see how the rest of Wall Street stacks up against Moskowitz’s view.

Palantir

As mentioned, Wall Street likes a theme – and often, that comes with a large dollop of hype. One company that has generated plenty of it is Palantir, a firm focused on data analytics and machine learning – or, more snappily, a Big Data specialist.

The company has positioned itself as a key player in helping both government and commercial organizations make sense of vast, complex datasets – a capability that aligns well with the growing interest in AI. Investors are attracted to Palantir’s narrative of being more than just AI-related; it presents itself as a provider of data infrastructure that supports AI-driven solutions, particularly in defense and intelligence, while also expanding into healthcare and manufacturing.

The stock has been one of the AI trend’s biggest winners and its ascent can be traced back to April 2023, when the company released its AIP (artificial intelligence platform) offering. This is Palantir’s tool for helping businesses integrate large language models and AI into their operations. It allows users – often without deep technical backgrounds – to interact with data, build workflows, and make decisions using AI in a secure, controlled environment. Essentially, it bridges the gap between raw AI capabilities and real-world business use, making advanced models more accessible and useful across industries.

AIP has not only driven massive investor enthusiasm but is also translating into strong financial performance. In its 1Q25 results last month, Palantir reported revenue of $883.85 million, up 39.3% year-over-year and beating analysts’ forecasts by $21.7 million. On the bottom line, adjusted EPS came in at $0.13, in line with Street expectations. And for Q2, the company is guiding for revenue between $934 million and $938 million – well ahead of the $899.12 million consensus.

It’s clear Palantir has been executing at a high level but for many Street watchers, the problem is that the stock – which has surged by more than 1500% since AIP’s release – has gotten way ahead of itself and now has a very bloated valuation.

This problem informs Moskowitz’ thesis, who wrote, “We are raising our PT to $116 (from $94) on PLTR’s strong recent execution and significant upward revisions, along with recent appreciation in comp multiples. Our PT reflects 2025E-26E EV/ Sales multiples of roughly 80x and 65x. This also equates to a large 6x premium to our enterprise software peer group median for next year, reflective of PLTR’s strong strategic positioning with large customers, and potential for further accelerated growth in future years… We believe PLTR has impressive US Commercial traction, and that AIP may be a game-changer for the company, but that this appears to be fully reflected in the valuation.”

Accordingly, Moskowitz rates the shares as Underperform (i.e., Sell), while that new $116 price target sits 15% below the current share price. (To watch Moskowitz’ track record, click here)

The Street’s average price target is an even more bearish $104, a figure that factors in a 12-month slide of ~24%. All told, the stock claims a Hold (i.e., Neutral) consensus rating, based on a mix of 11 Holds, 4 Sells and 3 Buys. (See PLTR stock forecast)

Microsoft

Palantir might be riding high on AI hype, but it’s fair to say Microsoft’s positioning as one of the world’s most valuable companies has little to do with hype and is all about substance. After all, it has been a household name for decades now.

What sets Microsoft apart in the AI race is not just its early and deep investment in the space – particularly its multibillion-dollar backing of ChatGPT maker OpenAI – but its ability to integrate those capabilities across a massive, existing product ecosystem. From embedding AI into Office and Azure to launching Copilot across its platforms, Microsoft is turning AI into a utility baked into everyday enterprise software.

While companies like Palantir are still proving how widely their AI tools can be adopted, Microsoft is already pushing AI features to millions of users – it’s bringing it into products businesses already use and pay for. That gives it a big advantage, and it’s a big reason why investors are watching its AI-related performance closely in each quarterly report with AI being a key part of its Azure segment.

In the most readout, for the third quarter of fiscal 2025 (April quarter) that segment outperformed. Azure’s revenue rose by 33% compared to the same period last year, the strong performance being a major factor behind Microsoft’s overall revenue increase of 13% year-over-year, totaling $70.1 billion. While analysts had anticipated around 30% growth for Azure, the actual figure surpassed those estimates, with Microsoft reporting an even higher growth rate of 34% to 35% when measured in constant currency.

More recently, the tech giant participated in the Mizuho Technology Conference, and following the event, Moskowitz reminded investors why Microsoft remains an AI name to be reckoned with: “On the macro environment, mgmt reiterated that it saw no major shift through April, and highlighted the generally defensible nature of its product portfolio given a strong focus on areas that include productivity and security. That said, MSFT acknowledged that some areas, such as online advertising, would of course be impacted by a weakening macro. While MSFT noted during F3Q earnings that it isn’t factoring in any real macro weakness (from tariffs, etc.) into the guide, we would also remind investors that this is a very thoughtful management team, and that MSFT is entering its seasonally strongest quarter that should include a lot of large enterprise renewals… MSFT continues to show that it can execute at a generally high level, and that it is a clear beneficiary of GenAI adoption and monetization. We also expect MSFT to continue to demonstrate a commitment to profitable growth.”

To this end, Moskowitz rates MSFT shares an Outperform (i.e., Buy), backed by a $500 price target.

Moskowitz is one of many MSFT supporters on Wall Street. All in, the stock claims a Strong Buy consensus rating, based on a mix of 31 Buys vs. 5 Holds. (See MSFT stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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