2 S&P 500 shares utilizing AI to gasoline explosive progress

Large tech shares with $1trn+ market caps have turn into synonymous with the S&P 500. Nonetheless, there are different corporations within the index that look set for years of AI-fuelled enterprise progress. Listed here are two.

Palantir

First up, we’ve Palantir Applied sciences (NASDAQ: PLTR), which was added to the S&P 500 in September. The inventory rocketed 340% final yr and is already up one other 37% in 2025!

Palantir is a software program firm that helps prospects combination their knowledge to make higher choices. Traditionally, it has labored primarily with authorities organisations, together with the CIA, US army, and the NHS.

Nonetheless, it has extra not too long ago branched out to assist enterprises. In This autumn, US business income jumped 64% yr on yr!

A real game-changer got here in 2023 when it launched Synthetic Intelligence Platform (AIP). This isn’t only a chatbot — it’s a robust decision-making AI system that helps organisations analyse, predict, and act on knowledge.

For instance, intelligence and defence companies use it to detect threats and plan army operations. Banks use AIP to detect fraud, whereas it may assist pharma corporations pace up drug discovery. 

Our enterprise outcomes proceed to astound, demonstrating our deepening place on the centre of the AI revolution. Our early insights surrounding the commoditisation of huge language fashions have advanced from concept to reality.

Palantir CEO Alex Karp, This autumn 2024

Whereas huge progress is being delivered at each ends of the revenue assertion, the valuation greater than displays this. Proper now, the price-to-sales (P/S) ratio is 71. I can’t justify investing at this worth. It principally leaves zero room for error (demand for AI options may cool off in 2026, for instance).

That stated, I’d like so as to add Palantir to my portfolio, as soon as the valuation is extra palatable.

Axon

One other inventory that appears set for a few years of AI-powered progress is Axon Enterprise (NASDAQ: AXON). The corporate is known for inventing the Taser stun gun (which is definitely a model that Axon owns). These days although, it additionally makes cash from physique cameras, sprint cameras, drones, VR-based coaching, and software program providers.

Axon has demolished Wall Avenue’s earnings estimates by greater than 20% for 4 straight quarters! No marvel the inventory is up 157% in a yr.

All of the recorded footage gathered from physique and sprint cams, drones, police interviews, and different sources will get saved in its cloud-based platform (Proof.com). From this large knowledge set, the corporate is conjuring up some highly effective AI options for its legislation enforcement prospects.

Certainly, it has so many concepts that it has launched a subscription service that bundles in all present and future AI merchandise.

We’re positioning ourselves because the indeniable chief in delivering the ability of AI in sensible, usable functions.

Axon CEO Rick Smith.

One doubtlessly game-changing new AI product is Draft One. This transcribes physique digicam audio into draft police experiences, decreasing an officer’s time spent writing experiences by as a lot as 70%.

The inventory isn’t as expensive as Palantir, nevertheless it’s actually not low-cost. The P/S a number of is round 26. Consequently, a deceleration in progress is a threat, whereas Draft One may not reside as much as the early hype.

Nonetheless, I’m very bullish right here. Axon is my high holding, but I wouldn’t assume twice about including to it if the inventory dropped 20%-30% throughout a market meltdown.