By any measure, Palantir (PLTR)—an early AI adopter deeply penetrated within the U.S. protection trade—has been profitable. Its income soared 48% within the second quarter versus the identical interval a yr earlier. And its working earnings for the 12 months led to June got here in at $569.5 million, pacing properly forward of FY 2024’s $310.4 million.
However after years of benefiting from fairness markets’ insatiable enthusiasm for AI winners, particularly these capable of fulfill high-security authorities contracts, Palantir’s valuation has reached nosebleed ranges, with a ahead price-to-earnings ratio (P/E ratio) of 217 instances.
Most of Palantir’s stockholders, particularly retail holders whose dedication to the corporate runs deep, seemingly don’t care. However its excessive valuation might lead some to search for alternative routes to purchase into the pattern of protection and safety companies’ growing demand for AI instruments.
For long-term buyers questioning if now may be the best time to diversify away from Palantir, the corporate’s better-priced rivals could also be price a glance.
Palantir rivals poised to revenue from Protection Division offers
Hiring patterns tracked by ClearanceJobs.com reveal a good cohort of publicly-traded AI tech corporations that, like Palantir, are actively recruiting for security-cleared positions. The info affords a singular window into every firm’s trajectory and the breadth of its accomplice ecosystem—by measuring job postings by shoppers, companions, and subcontractors in search of candidates proficient in that firm’s platform.
Palantir Applied sciences CEO Alex Karp rides wave of presidency contracts for AI tasks.
Picture supply: Kevin Dietsch/Getty Photos
Spoiler alert: Palantir stays by far the dominant participant, with just one rival—the a lot smaller ServiceNow (NOW)—starting to construct recruiting momentum for security-cleared professionals. ServiceNow’s lately reported Q3 earnings exceeded steerage and included a revised forecast for subscriptions that despatched its inventory sharply increased after the shut.
From January to June 2025, Palantir and its accomplice ecosystem posted a mean of 363 new listings every month in search of security-cleared professionals for AI roles utilizing Palantir’s expertise. This tempo rose to 416, 467, and 523 from July by means of September—signaling sturdy growth of Palantir’s defense-related AI enterprise.
Nonetheless, latest studies have raised considerations concerning the agency: one cited a U.S. Military warning that its joint communications community faces “fundamental security” dangers, and one other questioned Palantir’s resolution to not bid on the UK’s digital ID mission.
Right here’s a have a look at the remainder of the sector:
ServiceNow hiring for protection jobs climbs
ServiceNow is essentially the most constant challenger. Like Palantir, it affords essential AI instruments and serves the protection sector. Its Q3 income grew 20.5% yr over yr—about half Palantir’s tempo—however its inventory trades at a far decrease ahead P/E (45 vs. 217).
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Hiring knowledge from ClearanceJobs reveals a pointy uptick in demand for AI professionals with safety clearances tied to ServiceNow’s expertise, leaping from 30 to 69 per 30 days early in 2025 to 130 in August and 76 in September. This means rising defense-related AI momentum. Regardless of that energy, whereas PLTR has soared greater than 150% in 2025, NOW is down 2.5% yr to this point.
C3.ai defense-related alternative
Based by knowledge administration veteran Tom Siebel, who bought Siebel Programs to Oracle for $5.8 billion in 2006, C3.ai (AI) develops enterprise AI software program and counts main shoppers akin to Shell, Financial institution of America, and Nucor, a steelmaker. Huge protection clients embody the U.S. Military and Air Pressure, and shipbuilder Huntington Ingalls (HII).
Following Siebel’s well being points, C3.ai income fell sharply in its fiscal Q1 ending July, and ClearanceJobs knowledge reveals solely two defense-related AI job postings within the first 9 months of this yr—suggesting restricted near-term development in that section.
Nonetheless, new CEO Stephen Ehikian—previously with Salesforce and the U.S. GSA—has overhauled management, including seasoned executives from Oracle and different corporations. C3.ai nonetheless reported 266 energetic manufacturing deployments as of Q1, indicating a large base of ongoing tasks. The corporate is just not but worthwhile and due to this fact lacks a P/E ratio, nevertheless it trades at a price-to-sales ratio of about 6.7x, properly under Palantir’s roughly 137x, reflecting each its slower development and potential upside if execution improves.
IBM’s protection division job development regular
IBM (IBM), like C3.ai, has constructed its personal AI platform, WatsonX.ai, which permits companions to coach and deploy generative AI and machine studying fashions. In Might 2025, IBM gained a $48 million Protection Division contract for its NorthPole AI chip, and protection contractors make the most of its expertise for logistics, stock administration, and cybersecurity.
ClearanceJobs knowledge reveals AI roles tied to IBM’s tech holding regular at a comparatively low degree in 2025—with a excessive of 19 in July and 4 in September. IBM’s third-quarter pre-tax working earnings rose 22% yr over yr to $3.0 billion, and its inventory trades at a ahead P/E of 24.
Booz Allen Hamilton depends closely on authorities checks
In contrast to Palantir and ServiceNow, which serve each authorities and personal shoppers, Booz Allen (BAH) earns nearly all of its income from Washington. Its shares are down 34% in 2025, seemingly reflecting considerations about Trump administration price range cuts.
Booz has its personal Pentagon-only AI software program and in addition integrates platforms like Palantir’s. Income dipped 8.1% yr over yr to $2.9 billion in its fiscal second quarter, reported on Oct. 24. Internet Earnings was $175 million, a 55.1% lower, and its adjusted earnings per share dropped 17.7% year-over-year.
Indicators level to restoration: its backlog rose 2.9% to $40 billion, and ClearanceJobs knowledge reveals elevated recruitment for people with safety clearances for AI-related positions—from a mean of 18 adverts per 30 days in early 2025 to twenty-eight, 32, and 41 in July, August, and September.
SAIC (SAIC) additionally competes for presidency AI contracts
Like Booz Allen, SAIC (SAIC) earns most of its income from the U.S. authorities and implements different corporations’ AI instruments—akin to ServiceNow’s—for federal shoppers. It additionally has its personal AI platform, constructed round Koverse, a 2021 acquisition that permits AI and machine studying on delicate knowledge.
SAIC’s newest quarter confirmed a slight year-over-year gross sales decline, however a robust book-to-bill ratio of 1.5, signaling seemingly enchancment forward. The inventory trades at a low ahead P/E of 11.
From February to September 2025, SAIC posted not more than 5 security-cleared AI positions per 30 days, displaying low presence in defense-related AI. Future contracts or acquisitions may change that.
Associated: Palantir might be looking at a giant drawback
