In March 2025, over half of the top-performing artificial intelligence (AI) stocks were down as much as 55% from their 52-week highs, according to analysts at Equitymaster. That may sound like a red flag. But for bargain-hunting investors with an eye on the future, it might just be a green light.
Despite the steep sell-offs, many players in the AI space haven’t stopped growing or innovating—quite the opposite, in fact. Among the names making headlines are C3.ai and Palantir Technologies, two companies developing cutting-edge technologies that aim to define how businesses operate in a data-driven world. Could these discounted stocks offer smart returns in 2025 and beyond?
Let’s break it down.
C3.ai: Enterprise AI at a Discount
If you’re unfamiliar with C3.ai, think of it as the behind-the-scenes engine helping large organizations deploy AI applications without needing a team of PhDs. Its AI Suite supports industries from energy to manufacturing and even defense, offering tools that streamline forecasting, detect fraud, and optimize operations.
While the company’s stock has dropped sharply—trading well below its all-time highs—it recently posted a promising 26% year-over-year revenue increase in its most recent earnings report (source). That growth comes as enterprises ramp up their investments in real AI integration, especially for automation and predictive analytics.
Here’s the intriguing part: Even with that growth, C3.ai’s valuation remains much lower than peers like Palantir. That discrepancy could create a buying opportunity for investors looking to tap into the expanding AI sector without paying a premium. According to Nasdaq, C3.ai could be a compelling long-term winner thanks to the durability of its platform and its partnerships in regulated sectors, which often have high switching costs.
Palantir Technologies: From Data Hubs to AI Command Centers
Meanwhile, Palantir Technologies is transitioning from a big data analytics provider to a rising AI powerhouse. Its Palantir Artificial Intelligence Platform (AIP) has started to gain serious traction in both commercial and government sectors. From battlefield simulations to financial forecasting, this platform enables real-time AI-driven decisions—a capability that few competitors can match.
Despite concerns over valuation in past years, Palantir has worked to justify its position with improved profitability and robust contract growth. Interestingly, the company has also leaned into current tech buzzwords like “generative AI,” releasing tools designed to help businesses generate code, reports, and forecasts using natural-language prompts.
The company has even reached profitability on a GAAP basis, something not all tech firms in the AI space can claim. And as noted by Seeking Alpha, Palantir is now consistently ranked among the top AI stocks to watch, given its expanding commercial revenue base and deep integration with U.S. government data infrastructure.
AI Sector Outlook: Innovation Without Pause
One surprising fact? The global AI market is expected to grow at a compound annual growth rate of 37.3% through 2030. That’s according to Equitymaster’s March report, which underscores why short-term volatility in AI stocks may reflect market digestion—not fundamental weakness.
Let’s face it: Generative AI piqued investor interest in 2023 and 2024. But now, it’s the real, practical applications—think enterprise automation, predictive maintenance, and AI-assisted healthcare diagnostics—that are attracting capital. Companies like C3.ai and Palantir are positioning themselves to lead in this next wave of AI adoption.
The tech world is also seeing a broader recalibration across high-growth names. After runaway valuations during the hype cycle, the recent pullback could offer a “reset” for long-term investors. As Nasdaq predicts, AI stocks are well-positioned to beat market returns over the next few years, particularly for investors with patience.
Should You Consider These Stocks for Your Portfolio?
Are these stocks a sure bet? No investment ever is. But with strong fundamentals, improving margins, and a front-row seat to the largest tech transformation since the internet, C3.ai and Palantir may reward those willing to weather a bit of turbulence.
As always, due diligence is key. But if you’re looking to ride the AI wave without overpaying, these discounted stocks offer an attractive risk-reward profile for 2025.
After all, when was the last time you got to invest in next-gen technology—at last-gen prices?
Conclusion
If the future of artificial intelligence is being forged right now—by companies like C3.ai and Palantir—why are so many investors still looking through a rearview mirror? Maybe the real risk isn’t betting on beaten-down tech stocks, but ignoring the steady transformation reshaping how economies, governments, and even militaries operate. These aren’t just companies; they’re infrastructure for the AI age—quietly embedding themselves into the critical systems we’ll all come to rely on.
So the question isn’t just whether these stocks will rebound—it’s whether we’re recognizing the right signals of long-term value in a world where hype fades, but innovation marches on. As AI moves from experiment to execution, perhaps it’s time to rethink what makes a smart investment—not just for 2025, but for the decade to come.
