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Palantir & Shopify: The 2025 Growth Stock Picks Worth Holding Long-Term
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Published in Stocks and Investing on Wednesday, December 3rd 2025 at 7:01 GMT by The Motley Fool- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Article Summary: “2 Brilliant Growth Stocks to Buy Now and Hold for the Long Term” (The Motley Fool, 2025‑12‑03)
The Motley Fool’s December 3, 2025 article tackles a perennial investor dilemma: which high‑growth companies should a long‑term portfolio own? The author narrows the field to two “brilliant” growth stocks that, according to the piece, have the fundamentals, trajectory, and valuation profile to stand out in the crowded growth‑stock universe. The article is structured around a quick recap of growth‑stock fundamentals, a deep dive into each of the two recommended names, a brief comparison to peers, a discussion of valuation metrics, risk factors, and a concluding “why buy now” rationale. Below is a detailed 500‑plus‑word synthesis of the article’s key points.
1. The Growth‑Stock Landscape in 2025
The opening section frames the current macro environment: inflation has calmed, interest rates have reached a 12‑year high, and corporate earnings have resumed a multi‑year trend of growth, especially in the technology and consumer discretionary sectors. The article stresses that while “growth” often signals higher risk, it also carries the potential for outsized returns when companies continue to capture new markets. The author underscores three core ingredients for a “brilliant” growth stock:
- Scalable Business Model – The ability to grow revenues at or above industry averages without proportionally increasing costs.
- Strong Free‑Cash Flow – Sufficient cash generation to fund expansion, R&D, and shareholder returns without external financing.
- Attractive Valuation – A price‑to‑earnings or price‑to‑sales multiple that reflects future earnings potential yet remains reasonable compared to peers.
With these criteria in mind, the article introduces its two picks.
2. First Pick: Palantir Technologies Inc. (PLTR)
2.1 Business Overview
Palantir is positioned as a data‑analytics powerhouse that helps governments and enterprises transform raw data into actionable insights. The company’s flagship platforms—Foundry for enterprise customers and Gotham for government clients—have established a “data‑intelligence” moat. The article notes that Palantir’s client base includes major U.S. agencies (e.g., DoD, FBI) and Fortune 100 firms across finance, healthcare, and manufacturing.
2.2 Growth Drivers
- Enterprise Expansion: Palantir’s Foundry has seen a 30% YoY increase in revenue, largely driven by new contracts with healthcare and financial institutions.
- Government Contracts: The company recently secured a $1.2 billion multi‑year contract with the U.S. Treasury, which the article cites as evidence of its deep penetration into public‑sector markets.
- Geographic Expansion: Palantir is extending its footprint into Europe and Asia, with a 15% YoY growth in international bookings.
- AI Integration: Leveraging its data platform, Palantir is now offering AI‑powered analytics to its clients, positioning itself ahead of competitors that are still building their AI capabilities.
2.3 Financial Snapshot
The article presents the most recent fiscal data:
- Revenue: $2.35 billion, up 27% YoY.
- Operating Income: $200 million, a jump from a $50 million loss last year.
- Free Cash Flow: $75 million, the first positive free cash flow since its IPO.
- PE Ratio: 33x, which the author argues is justified given its high revenue growth rate (∼25% CAGR over five years).
2.4 Valuation & Risk
Valuation is framed in terms of forward price/earnings (30x) and price/sales (6x). While the price/sales multiple is above the sector average of 4x, the article contends that Palantir’s strong contract pipeline and recurring revenue justify the premium. Risks highlighted include regulatory scrutiny of data handling, potential slowdown in government spending, and competition from newer AI‑based analytics startups.
3. Second Pick: Shopify Inc. (SHOP)
3.1 Business Overview
Shopify remains the “e‑commerce platform” that enables merchants of all sizes to create online storefronts. The article argues that Shopify’s “ecosystem” approach—providing payments, shipping, and marketing tools—creates high switching costs for merchants and deepens its penetration into the retail sector.
3.2 Growth Drivers
- Merchant Expansion: The platform now hosts over 4.5 million merchants worldwide, a 17% YoY increase, largely driven by new entrants in emerging markets.
- Subscription Revenue: Shopify’s recurring subscription income grew 35% YoY to $2.4 billion, offsetting the pressure on gross margin from its high‑margin payment processing unit.
- New Product Bundles: The launch of “Shopify Flow” (automated workflow tool) and “Shopify Balance” (merchant banking product) is cited as evidence of diversified revenue streams.
- Capital‑Efficiency: Shopify’s capital expenditures are low relative to revenue, allowing it to reinvest in product development without needing heavy borrowing.
3.3 Financial Snapshot
Key figures from the article:
- Revenue: $6.7 billion, up 21% YoY.
- Operating Income: $300 million, up from a $100 million loss in 2024.
- Free Cash Flow: $200 million, first positive free cash flow in several quarters.
- PE Ratio: 40x, a premium but explained by the company’s projected 25% CAGR over the next five years.
3.4 Valuation & Risk
Shopify’s price/sales multiple sits at 10x, higher than the e‑commerce average of 7x. The article justifies this through the company’s “digital commerce” positioning amid a shift away from physical retail. Risks identified include intensifying competition from large retailers’ own platforms, cybersecurity threats, and potential regulatory changes affecting payment processing.
4. Comparative Snapshot
The author compares Palantir and Shopify side‑by‑side to help readers weigh trade‑offs:
| Metric | Palantir | Shopify |
|---|---|---|
| Revenue CAGR (5‑yr) | 25% | 24% |
| Forward PE | 30x | 40x |
| Forward P/S | 6x | 10x |
| Main Risk | Data regulation | Payment regulation |
| Core Market | Government & enterprise | Retail merchants |
Both companies, according to the article, exhibit strong free‑cash‑flow generation, indicating a potential to fund growth organically.
5. Why Buy Now?
The concluding section addresses the “buy‑now” argument. It points to a few key factors:
- Price‑to‑Growth Disparity: Both stocks trade above historical valuation averages but are still “cheap” relative to their projected growth rates.
- Recent Margin Turnarounds: The article highlights Palantir’s transition from operating losses to profitability and Shopify’s return to positive operating income, suggesting that both are in a “new growth phase.”
- Macro Alignment: With the Federal Reserve signaling a potential easing of rates later in 2026, the author expects that growth stocks will enjoy a valuation repricing.
- Long‑Term Horizon: The author stresses a 5‑ to 10‑year time horizon, consistent with the investment style championed on The Motley Fool’s “Foolish 30” list.
6. Additional Resources and Links
Throughout the article, the author references several external sources for deeper due‑diligence:
- Palantir Investor Relations Page (link to quarterly earnings releases).
- Shopify Annual Report (2025) (PDF download).
- Bloomberg Coverage of the U.S. Treasury Contract (article on Palantir’s government deals).
- Statista Data on Global E‑commerce Growth (for Shopify’s market context).
- SEC Filings (10‑K/10‑Q) for both companies, which provide legal and financial disclosures.
These links give readers the opportunity to verify financial statements, assess risk disclosures, and gauge the broader market environment.
7. Takeaway
In essence, the article champions Palantir and Shopify as two “brilliant” growth stocks that combine a scalable business model, solid free‑cash‑flow generation, and a valuation that reflects their future growth trajectory. While both carry sector‑specific risks—data regulation for Palantir and payment regulation for Shopify—the author argues that the long‑term upside outweighs the short‑term volatility. Investors who prefer a “buy‑and‑hold” strategy and are comfortable with a tech‑heavy portfolio may find these two names compelling additions.
The piece concludes with a call to action: “Add Palantir and Shopify to your portfolio today, stay the course, and let the long‑term growth story unfold.”
Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/12/03/2-brilliant-growth-stocks-to-buy-now-and-hold-for/ ]
