Palantir Stock Leads These Profitable AI Picks Worth A Closer Look

With inflation worries, higher energy costs, and central banks talking about keeping rates elevated, investors are paying closer attention to companies that already turn AI spending into real profits. That is exactly what the Profitable AI Stocks screener focuses on, highlighting businesses that are not just investing heavily in AI projects but are also generating cash from them. Instead of trying to guess which early stage ideas might work, you can study stocks that already show earnings support from AI. In this article, you will see 3 of the strongest candidates from that screener.

Advertisement

Datadog (DDOG)

Overview: Datadog is a software company that helps businesses monitor and secure their cloud applications in real time, pulling data from servers, databases, networks, apps, and AI systems into a single dashboard so teams can quickly spot and fix issues. Its platform also includes tools for security, incident response, and cost management, which aim to make complex cloud and AI workloads easier to run and control.

Operations: Datadog generates about US$3.7b in revenue from its information technology infrastructure monitoring and observability services, with roughly US$2.5b from the United States and just over US$1.0b from international customers, including North America outside the US.

Market Cap: US$93.7b

Datadog stands out in profitable AI because its observability and security tools sit directly on top of the cloud and AI workloads that many enterprises already rely on. Analysts expect strong earnings growth and improving margins over the next few years. At the same time, the stock carries a premium valuation, margins recently slipped, and there is heavy dependence on large AI focused customers, so any slowdown in usage or tougher competition from cloud giants could matter. With mixed analyst sentiment, insider selling, and fresh AI acquisitions such as Adaptive ML, Datadog offers a mix of high growth expectations, real profitability, and valuation and concentration risks that investors may want to weigh carefully.

Datadog’s premium price, real profits and AI heavy customer base suggest there is more beneath the headline story of growth versus concentration risk; start with the 1 key reward and 3 important warning signs

ServiceNow (NOW)

Overview: ServiceNow is a cloud software company that helps large organizations run their day to day work by digitizing tasks like IT support, HR requests, security incidents, customer service, and AI workflows on one platform so information flows between teams instead of getting stuck in email and spreadsheets.

Operations: ServiceNow generates about US$14.0b in revenue from internet software and services, with roughly US$8.3b from the United States and the rest from Asia Pacific and other regions, North America outside the US, and Europe, the Middle East and Africa.

Market Cap: US$108.0b

ServiceNow attracts attention because it sits at the center of critical workflows for government, financial services, healthcare, and large enterprises while tying those processes into AI tools like Now Assist and AI Control Tower. Some analysts link this positioning to strong subscription demand and a large backlog of nearly US$28b. At the same time, the stock trades on a high P/E, insiders have been selling, and all liabilities are funded by external sources. Valuation and funding structure are therefore important issues to consider. For investors looking at profitable AI platforms, the mix of recurring subscription revenue, growing AI use cases, and these still unresolved risks makes ServiceNow a company that some may wish to examine more closely.

ServiceNow’s accelerating AI workflows and large subscription backlog are only half the story; the real question is how that growth lines up with its high P/E and external funding mix, so start with the 3 key rewards and 1 important warning sign

Palantir Technologies (PLTR)

Overview: Palantir Technologies builds software platforms that help governments and large enterprises stitch together huge amounts of data, spot patterns, and guide real world decisions across defense, intelligence, and commercial use cases. Its tools increasingly sit at the center of AI driven operations, from battlefield command systems to insurers, airlines, and marketers looking to turn complex data into actions.

Operations: Palantir generates about US$2.8b from government customers and US$2.5b from commercial customers, with roughly US$4.0b coming from the United States and the rest split between the United Kingdom and other international markets.

Market Cap: US$323.3b

Palantir Technologies sits at an unusual intersection of high growth AI software and government grade data infrastructure, with strong profitability metrics, high margins, and a robust return on equity backing its AI story. Partnerships with NVIDIA and the U.S. Army highlight how its platforms can become core data and AI rails for sensitive missions. Commercial wins such as GNP Seguros and Zeta Global show that the model can extend well beyond defense. At the same time, investors need to weigh a rich valuation and funding structure risks against these strengths, as well as regulatory and data sovereignty pushback in parts of Europe that could shape how far Palantir’s model can scale globally.

Palantir Technologies sits at the center of government grade AI, but the real tension is whether its story is about momentum or overconfidence. Start with the analyst forecasts for Palantir Technologies to see what might be hiding behind the headlines.

The three profitable AI stocks in this article are only the starting point. The full Profitable AI Stocks screener surfaced 59 more companies that are already tying AI spend to real earnings stories that you have not seen yet. Unlock those ideas on Simply Wall St, and use the platform to identify and analyze the specific catalysts, cash flows, and risk narratives that matter most so you can focus on the highest conviction opportunities.

Take Control of Your Investment Journey

If Palantir Technologies or any of these companies have caught your attention, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value and track any new developments as they happen. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

Seeking Alternatives Before Everyone Else?

Fresh opportunities can move from quiet to crowded quickly, and once momentum is flying, entry points get harder to find. Scan these curated ideas while it matters and consider your options.

• Target steady compounding potential by checking companies in the 81 resilient stocks with low risk scores that aim to prioritize balance sheet strength and consistent fundamentals before they get fully priced in.
• Catch early breakout stories by reviewing the curated 20 high quality undiscovered gems that remain under the radar for now but already show solid business quality and financial discipline.
• Explore structural demand shifts by assessing the 35 power grid technology and infrastructure stocks highlighting companies tied to essential grid upgrades and electrification trends.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com