The market has partially recovered from the 2025 lows it touched last month, but it's still well off its highs, which makes this a great time to add some new stocks to your portfolio. An investment of $1,000 would be a good amount to start with; you can add more later on any market dips. If you're ready to put some money to work, PalantirTechnologies(NASDAQ: PLTR) and Alphabet(NASDAQ: GOOGL)(NASDAQ: GOOG) would be great stocks to start accumulating.
1. Palantir
While the stock is not cheap, Palantir Technologies has one of the best opportunities to become the next megacap tech company and help lead the market. It has not only been growing quickly, but it has seen accelerating revenue growth in the past seven quarters, culminating in 39% sales growth in Q1.
Palantir began as a data gathering and analytics provider for U.S. intelligence agencies and the Defense Department, where its solutions were used in such mission-critical tasks as fighting terrorism. However, the Palantir Artificial Intelligence Platform (AIP) has helped transform it into one of the most important AI companies on the planet.
Rather than competing to build the most advanced AI models, Palantir has focused on the application and workflow layer of AI. The AIP platform uses ontology to map digital data and models onto real-world operations and objects (such as products, inventory, or customer orders), enabling users to identify problems and apply AI to solve them. More recently, Palantir has introduced AI agents within AIP that help automate decisions and drive action.
The company's solutions are being embraced across industries for a variety of tasks. For example, Tampa General Hospital is using an AIP tool to monitor patients for sepsis, while pipeline giant Kinder Morgan is using the platform to help it with tasks such as storage optimization, pipeline integrity monitoring, and power optimization. Insurance giant AIG is using it to help it underwrite insurance, while a telecom is using AIP to manage and accelerate its decommissioning of old network technologies and equipment.
Meanwhile, the company has also seen more growth with its largest customer, the U.S. government, which has begun embracing AI. The company largely views itself as a Department of Government Efficiency (DOGE) winner, as its platform can help reduce costs and create efficiencies. It also recently won a big deal with NATO, signaling a potential new market for the company.
The breadth of problems to which Palantir's solutions can be applied and the huge opportunities in front of the company are what make its stock an intriguing investment for the long term.
Image source: Getty Images
2. Alphabet
On the opposite side of the spectrum, but no less intriguing, is Alphabet(NASDAQ: GOOGL)(NASDAQ: GOOG). Many investors are concerned that the company's search business is being disrupted by the growth of generative AI tools and large-language models. An Apple executive's recent comments that in April, search queries on its Safari browser declined for the first time ever -- and that the iPhone maker is looking to add AI search options to its browser -- only added to this narrative.
However, context is key. Those comments came during the remedies portion of the Justice Department's antitrust trial against Alphabet, and Apple has every incentive to downplay the power of Google Search and emphasize its increasing competition. The reason is that Apple gets $20 billion in annual revenue-sharing money from Alphabet for making Google the default search engine on its Safari browser. That revenue is basically pure profit. If the court and the Justice Department conclude that Alphabet has an effective monopoly in search, the two tech giants may not be allowed to keep that deal. As such, Apple has every reason to want to show that Google Search is losing market share.
In a blog post, Alphabet denied that its search queries were declining, including on Apple devices and platforms. Technically, both statements could be true if more people were using other browsers or going directly to Google's app to conduct searches. It's also notable that the European Union began requiring Apple to present users with a choice of browsers beyond Safari when setting up devices last year. More EU users could choose Google Chrome or Opera, which also has a revenue-share agreement with Alphabet.
Alphabet's most recent results showed no indication that the rising use of AI chatbots was impacting its search business: Search revenue increased by 10% in Q1. In my view, AI chatbots are likely to be more complementary to search than replace it. Given the much higher cost to run AI queries, I think access to them is likely to come to users through more of an ad-supported subscription model, and that many people will opt to stick with free search.
It's also important to remember that Alphabet has historically only monetized about 20% of its search queries. Losing market share to AI tools for things like homework help will have minimal financial impacts on it, since these queries have no clear commercial intent. Meanwhile, Alphabet's vast and highly effective ad network, which can connect businesses to users across both local and global markets, should not be underestimated. This gives it a competitive moat that would be difficult to replicate.
Alphabet is also about much more than search. It has one of the most-viewed video streaming platforms in the world and a fast-growing cloud-computing business. These two businesses are highly valuable. Meanwhile, Waymo has become the leading robotaxi business in the U.S. and has been expanding rapidly. Uber recently said that its Waymo partnership is greatly outperforming human drivers in Austin, Texas. This has the potential to be Alphabet's next big business.
With its stock trading at a forward price-to-earnings ratio (P/E) of 16, this tech leader is a bargain that's too cheap to pass up on.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has positions in Alphabet and Opera. The Motley Fool has positions in and recommends Alphabet, Apple, Kinder Morgan, and Palantir Technologies. The Motley Fool has a disclosure policy.
