Palantir Technologies recently reported stellar fourth-quarter financial results that propelled its market value to $230 billion. But some Wall Street analysts think Advanced Micro Devices (AMD -6.27%) and ServiceNow (NOW 1.68%) will surpass that figure in the next year, as detailed below:

• Hans Mosesmann at Rosenblatt Securities recently reiterated his AMD target price of $250 per share. That forecast implies 127% upside from its current share price of $110. It also implies a market value of $405 billion by early 2026.
• Tyler Radke at Citigroup recently reiterated his ServiceNow target price of $1,426 per share. That forecast implies 40% upside from its current share price of $1,020 and a market value above $290 billion by early 2026.

Read on to learn more about Advanced Micro Devices and ServiceNow.

Advanced Micro Devices: 127% upside implied by Rosenblatt's target price

Advanced Micro Devices (AMD) is a semiconductor company that designs chips in four end markets: data centers, client (personal computers), gaming, and embedded processors. In recent years, the company has consistently gained market share in central processing units (CPUs) in the client and data center segments, while Intel has lost market share.

While AMD has endeavored to challenge Nvidia, it has failed to gain market share in data center graphics processing units (GPUs). Consequently, Nvidia utterly dominates the artificial intelligence (AI) accelerator market with "no major competition in sight," according to TechInsights.

AMD beat fourth-quarter earnings estimates, but data center sales came in below what analysts anticipated. Total revenue increased 24% to $7.6 billion and non-GAAP earnings rose 42% to $1.09 per diluted share. On the earnings call, CEO Lisa Su told analysts that data center AI sales would increase from $5 billion in 2024 to "tens of billions of dollars of annual revenue over the coming years."

Wall Street expects AMD's adjusted earnings to increase 43% in the next four quarters. That makes the current valuation of 32 times adjusted earnings look cheap. Admittedly, AMD faces tough competition in CPUs from Arm and tougher competition in AI accelerators from Nvidia (and Broadcom). But the cheap price tells me most investors are overlooking this company.

I doubt AMD stock will return 127% in the next 12 months, but the median target price of $155 per share still implies 40% upside from the current share price of $110. That would carry its market value to $250 billion, topping Palantir's current valuation of $230 billion. Investors should consider buying a small position in AMD stock today.

ServiceNow: 40% implied upside by Citigroup's target price

ServiceNow provides software that helps businesses digitize and automate workflow. The company is best known for its dominant positions in the IT service management (ITSM) and IT operations management (ITOM) markets, but also has a strong presence in hybrid cloud management, digital process automation, and customer service solutions.

ServiceNow was one of the first companies to add generative AI capabilities to its software products. The platform, called Now Assist, includes tools that summarize information, draft customer service responses, and helps software developers with coding projects, among other use cases. Consultancy firm Gartner recently recognized the company as a leader in AI for ITSM applications.

The company reported decent financial results in the fourth quarter despite narrowly missing sales estimates. Revenue increased 21% to $3 billion, and non-GAAP net income increased 18% to $3.67 per diluted share. Operating margin remained flat, but earnings growth still trailed sales growth because the outstanding share count increased.

Wall Street estimates ServiceNow's adjusted earnings will increase 18% over the next four quarters. That consensus makes the current valuation of 73 times adjusted earnings look expensive. For that reason, I think Tyler Radke at Citigroup is too optimistic in thinking the stock will hit $1,426 per share in the next 12 months.

However, the median target of $1,200 per share still implies 18% upside from the current share price of $1,020. That would push its market value to $247 billion, which would top Palantir's current valuation of $230 billion. Additionally, ServiceNow plans to launch new agentic AI products in March, which could create upside to current earnings estimates. Investors should consider buying a small position today despite the rich valuation.