Booz Allen trades at a fraction of Palantir's valuation despite strong AI and defense growth.

Palantir Technologies has surged 524% over five years but trades at extremely high multiples, reflecting expectations of future growth. In contrast, Booz Allen Hamilton, also an AI and defense contractor with strong government ties, trades near 1x sales and offers a growing dividend, buybacks, and a $40 billion backlog. Despite recent revenue dips due to a government shutdown, Booz Allen's core defense business remains stable with rising cash flow and net income. The company’s valuation appears undervalued compared to Palantir, making it an attractive option for investors seeking AI exposure in government contracts without the high risk of Palantir's premium pricing.