Palantir Technologies PLTR and arm holdings Both ARMs are deeply aligned with the same strong theme: accelerating the global adoption of artificial intelligence. Each plays a fundamental role in enabling AI at scale.
Palantir supports AI adoption through an advanced data integration, analytics, and decision-making platform that enables organizations to operationalize complex data. ARM powers AI advances at the hardware level by licensing energy-efficient processor architectures that power AI workloads across mobile devices, cloud infrastructure, and data centers. Despite their different service offerings, both companies occupy key points in the AI value chain and directly benefit from the growing demand for intelligent, scalable computing solutions from businesses, governments, and consumers.
For PLTR
Palantir is strategically positioning itself to take advantage of the changing dynamics of the AI economy.
At the core of Palantir's strategy is an artificial intelligence platform. This allows businesses to structure and organize their financial, supply chain, operational, and HR-related data so that AI can process and execute tasks more effectively. By leveraging an ontology-driven approach, Palantir creates a digital representation of the entire enterprise and enables AI to seamlessly interact with business operations. Unlike companies that contribute to the oversupply of AI models, Palantir is actively shaping the demand side of the AI economy, establishing itself as a key player in enterprise AI adoption.
Palantir's financial strength further strengthens its investment appeal. As of September 30, 2025, the Company had $6.4 billion in cash and equivalents and no debt, providing sufficient liquidity to invest in its growth initiatives.
Additionally, Palantir's recent financial performance highlights its strength. In the third quarter of 2025, revenue increased 63% year over year, US revenue increased 77% year over year, and the US commercial business recorded 121% growth. During the quarter, the company closed 204 deals of $1 million or more, 91 deals of $5 million or more, and 53 deals of $10 million or more.
The company achieved a record adjusted operating margin of 51%, reflecting the scalability of its software business model and disciplined cost management. GAAP operating income reached $393 million, and GAAP net income was $476 million, which translated to GAAP EPS of 18 cents and adjusted EPS of 21 cents, an increase of 110% from the prior year period.
For ARM
Arm Holdings' fundamental advantages in power-efficient chip architecture continue to give it an edge in mobile computing, but its influence extends far beyond smartphones and tablets. It has long been known for enabling energy-saving designs. apple (AAPL), Qualcomm (QCOM), Samsung, and Arm are becoming increasingly central as these companies accelerate their focus on artificial intelligence (AI) and the Internet of Things (IoT).
ARM's unique ability to deliver high performance with minimal power makes its architecture ideal for an era where intelligence is embedded everywhere, from wearables to edge devices to cloud infrastructure. AI models are being deployed in a wide range of consumer and enterprise products, leveraging Arm's flexible, power-efficient designs to support these new workloads. Apple continues to rely on ARM-based architecture for its M-series chips while deepening the integration of AI across its devices. Qualcomm is leveraging ARM designs to power its AI-enhanced smartphone and automotive platforms, and Samsung is leveraging ARM technology in its expanding Exynos portfolio targeting mobile, consumer electronics, and AI and IoT applications.
The dependence of these big tech companies on Arm Holdings is not only consistent, but even stronger. As Apple, Qualcomm, and Samsung expand their AI ambitions and expand their IoT ecosystems, they will increasingly rely on ARM's ability to deliver power-efficient performance on a global scale. The company continues to optimize its architecture for machine learning and edge computing, ensuring close alignment with the emerging needs of its top customers.
As a result, Arm Holdings has evolved from a mobile-centric enabler to a critical AI and IoT infrastructure layer for the world's leading device manufacturers, solidifying its strategic importance in the broader technology landscape.
How does the Zacks Estimate compare to PLTR and ARM?
The Zacks Consensus Estimates for PLTR's 2025 revenue and EPS are pointing to year-over-year growth of 54% and 78%, respectively. EPS estimates have been trending upward over the past 60 days.
The Zacks Consensus Estimates for ARM's fiscal 2026 revenue and EPS are pointing to year-over-year growth of 21.5% and 5.5%, respectively. Over the past 60 days, EPS estimates have been trending upward.
ARM's valuation is more attractive than PLTR
ARM's 12-month forward P/E ratio is 52.93x compared to the median of 121.35x, which appears to be an attractive valuation, suggesting it may be undervalued relative to its historical price range, while PLTR's 12-month forward P/E ratio of 177.24x is below its 12-month median price of 308.7x.
PLTR appears to be an option
In the current AI-driven market environment, Palantir stands out as a more attractive option. While both companies benefit from long-term AI adoption, Palantir has a more direct connection to real-world AI execution and enterprise decision-making. The company's platform is already embedded in mission-critical operations across commercial and government sectors, creating persistent demand and high switching costs. Palantir's focus on operational AI puts it at the forefront of adoption rather than infrastructure dependence. With stronger momentum, clearer AI monetization, and a “buy” rating compared to an arms-hold stance, Palantir offers greater upside for investors seeking exposure to AI as a transformative business force rather than a supporting technology layer.
PLTR currently carries a Zacks Rank #2 (Buy), while ARM carries a Zacks Rank #3 (Hold). You can see See the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This article originally appeared on Zacks Investment Research (zacks.com).
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