The Russell 1000 index includes 95% of U.S. equities by market value. YCharts screened that group to identify the best-performing stocks during the 12-month period that ended on March 31, 2025. AppLovin(NASDAQ: APP) and Palantir Technologies(NASDAQ: PLTR) topped the list, with returns of 283% and 267%, respectively.
Some Wall Street analysts anticipate continued upside in those stocks during the next year, as detailed below:
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Rob Sanderson at Loop Capital Markets recently assigned a target price of $650 per share to AppLovin. That implies 173% upside from its current share price of $238.
Dan Ives at Wedbush Securities recently assigned a target price of $120 per share to Palantir. That implies 28% upside from its current share price of $94.
Here's what investors should know about AppLovin and Palantir.
AppLovin
AppLovin develops adtech software that enables developers to market and monetize their applications across mobile and connected TV campaigns. Most advertising on its platform has historically been focused on video games, but the company is pushing the bounds of its core direct-to-consumer market with a new e-commerce advertising product.
AppLovin has differentiated itself with Axon, a recommendation engine that helps brands target campaigns with great precision. Its machine learning algorithms evaluate the potential value of ad impressions to match advertiser demand with the most suitable publisher supply. In doing so, Axon benefits from a network effect, whereby its predictive capabilities improve over time.
AppLovin reported strong fourth-quarter financial results. Revenue increased 44% to $1.4 billion, and generally accepted accounting principles (GAAP) earnings increased 253% to $0.49 per diluted share. Notably, management also said its nascent e-commerce advertising product hit a billion-dollar run rate in mere months, which should account for approximately 10% of revenue in 2025.
CEO Adam Foroughi also highlighted successful pilots beyond direct-to-consumer brands on the fourth-quarter earnings call. "This opens a massive opportunity as there are over 10 million businesses worldwide who advertise online that could eventually use our platform profitably," he said. That means AppLovin's addressable market is expanding.
Wall Street expects the company's earnings to grow 45% in 2025, making the current valuation of 53 times earnings look relatively cheap. Those figures give a price-to-earnings-to-growth (PEG) ratio of 1.2. Additionally, Axon beat the consensus earnings estimate by an average of 26% in the last six quarters, which makes shares even more attractive. Despite recent attacks from short-sellers, patient investors should consider buying a position.
Image source: Getty Images.
Palantir Technologies
Palantir develops software platforms that help commercial organizations and government agencies integrate and analyze complex data. The company says its key differentiator is an ontology-based software architecture. An ontology is a framework that maps digital data to real-world objects to define nuanced relationships.
Users can query ontology data with analytical applications and machine learning models to surface insights and drive decision-making that improves over time. Additionally, since its software revolves around an ontology, businesses can apply artificial intelligence (AI) to their operations in a way that creates real value.
To quote Chief Technology Officer Shyam Sankar, "Years of foundational investments in our infrastructure and ontology have positioned us uniquely to harness and deliver on AI demand." In 2023, Palantir leaned into that advantage with the introduction of its Artificial Intelligence Platform (AIP), a product that enhances its core analytics platforms by adding support for large language models and natural language processing.
Palantir has delivered a series of increasingly impressive financial results since launching AIP, and that trend continued in the fourth quarter. Revenue increased 36% to $828 million, the sixth consecutive acceleration, and non-GAAP net income increased 75% to $0.14 per diluted share.
Wall Street expects Palantir's adjusted earnings to increase 36% in 2025. That makes the current valuation of 229 times adjusted earnings look absurdly expensive. Those numbers give a PEG ratio of 6.4. Admittedly, Palantir topped the consensus earnings estimate by an average of 13% in the last six quarters, but the current valuation would appear expensive even if that trend were to continue.
Importantly, while equity analyst Dan Ives acknowledges the current valuation is expensive, he also believes investors should look further into the future. Ives sees Palantir achieving a trillion-dollar market value, possibly within two or three years. That implies 355% upside from its current market value of $220 billion.
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Trevor Jennewine has positions in Palantir Technologies. The Motley Fool has positions in and recommends AppLovin and Palantir Technologies. The Motley Fool has a disclosure policy.
