Prediction: This Artificial Intelligence (AI) Software Stock Will Outperform Palantir, According to Wall Street (Hint: It’s Significantly Cheaper)
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Palantir Technologies(NASDAQ:PLTR) is among the leading names in the artificial intelligence (AI) software space, helping customers integrate generative AI into their operations to improve productivity and realize other benefits.
However, Palantir stock has been overshadowed on the market this year by another software specialist. Shares of cloud communications provider Twilio (NYSE:TWLO) have jumped by 46% in 2026, as of this writing, while Palantir has been flat. In fact, Wall Street expects Twilio to continue outperforming Palantir over the coming year.
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Let’s see how much upside Twilio stock could deliver, and why it looks like a better buy compared to Palantir.
Twilio’s price target suggests that it can outpace Palantir
Twilio has a 12-month median price target of $274, implying 32% upside from current levels. Meanwhile, Palantir’s 12-month median price target of $225 suggests a potential jump of 26% over the coming year. It is easy to see why that’s the case.
Twilio is significantly cheaper than Palantir in terms of valuation. This is evident from the following chart.
Of course, Palantir deserves to command a premium owing to its incredible growth, but Twilio is also growing at a nice clip. Twilio’s Q2 revenue increased 20% year over year to $1.56 billion, while non-GAAP earnings per share (EPS) increased by 32% to $1.65. Wall Street would have settled for $1.47 in EPS on $1.51 billion in revenue.
Even better, Twilio’s Q4 guidance landed ahead of expectations. The company expects revenue to increase by approximately 17% this quarter to $1.6 billion, ahead of the $1.58 billion consensus estimate. Also, the midpoint of its EPS forecast of $1.48-$1.53 is nearly in line with the $1.49 consensus estimate.
Another important point worth noting is that Twilio has increased its 2026 revenue growth estimate to 20% from the prior estimate of 18%-18.5%. Twilio has been integrating AI tools into its cloud communications platform to help its clients stay in touch with their customers across multiple channels, such as voice, email, text, chat, video, and others.
The company’s conversational voice AI tools allow customers to build and deploy agents that can automate tasks and improve productivity. This explains why Twilio has been winning more business from existing customers. Its dollar-based net expansion rate of 114% in Q3 improved by five percentage points from the year-ago quarter.
