City staff in the planning department at Bellevue, Wash., have a new assistant that already has a commanding understanding of development codes, zoning maps and other detailed information.

The department has been using an AI-powered “smart assistant” to aid in the city’s permitting processes. Earlier this month, Bellevue moved the project — a partnership with Govstream.ai — from its early testing phase to “real-world scenarios,” Sabra Schneider, Bellevue CIO, said.

The smart assistant tool has been trained in the city’s development code, GIS data, zoning codes, parcel data, permit history and more so that it can assist in speeding up the permitting process, Safouen Rabah, founder and CEO for Govstream.ai, said.

“The system drafts code-cited emails, checks plans for completeness, flags zoning conflicts, and answers routine questions,” Rabah said via email. “But staff always remain in control — reviewing, editing and making final decisions.”

The assistant is three tools in one, Schneider said via email: chat, email and voice, “all tied into the same knowledge base and built for government use, with traceability and staff oversight built in from the start.”

For now, planning staff is using the AI assistant to look up parcel-specific zoning rules and then generate draft responses to resident inquiries, with citations to the development code.

“We’re also starting to use the tool to analyze conversations between the AI assistants and staff for thematic insights about how our community interacts with different aspects of permitting,” Schneider said.

Ultimately, technology like this smart assistant will free staff from repetitive tasks — which Rabah described as “document toil” — allowing them to focus on “judgment-driven work like safety, equity and community priorities.”

Bellevue also plans to extend the technology to the public so that residents, designers or contractors can also benefit from fast, “citation-based answers” to questions regarding projects or processes, Schneider said.

Initiatives like the Govstream.ai pilot stem from Bellevue’s Innovation Forum, which brought together members of the community, startups, students and others to brainstorm how to enhance city services and the overall quality of life — part of a broader strategy, Schneider said, to make innovation more open and actionable. The city will host a Civic Innovation Day Oct. 16 to highlight civic innovation in the greater Puget Sound area.

AI tools that help to cut down on repetitive tasks, search quickly through data or smooth out workflow gaps work in the kinds of areas where experts say artificial intelligence can bring value to organizations. The technology, they stress, should serve people.

“When I talk about artificial intelligence, I not only talk about computation. I talk about people, first and foremost,” Nathan McNeese, founding director of the Clemson University Center for Human-AI Interaction, Collaboration and Teaming, said during a recent webinar to discuss the new report, Strategies for Integrating AI into State and Local Government Decision Making: Rapid Expert Consultation, by the National Academies of Sciences, Engineering and Medicine.

“You need to understand who your people are before you can even have the idea of putting AI into an organization. Because AI’s going to fail in your organization if people are not your first consideration,” he said.

And starting small — a pilot project in one city department, limited to internal staff — is also advisable, Suresh Venkatasubramanian, a computer science professor at Brown University, where he directs the Center for Technological Responsibility, Reimagination and Redesign, said as he urged tech leaders to embrace an ethos of experimentation and “sandboxing” to understand how the AI systems work, within a specific context.

“AI is not like buying a piece of software, you buy it once, and it’s done, because it serves a specific purpose,” Venkatasubramanian said during the webinar. “It’s one of those things where it’s an ongoing conversation amongst the folks using the system, the folks impacted by the system.”

Key Points

Palantir (NASDAQ: PLTR) has been one of the most explosive AI stocks to own over the past few years, rising 2,370% since the start of 2023. While some believe that Palantir can keep those returns up, I’m a bit more skeptical, and I think several companies will outperform Palantir, most notably is Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL).

It may seem a bit odd that I’m picking an established tech player to outperform one of the most exciting growth stocks over the next decade, but after digging into the numbers, it’s clear that Alphabet has a strong chance.

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Image source: Getty Images.

Palantir’s growth case is more promising than Alphabet’s

Palantir provides AI-powered data analytics software to its clients that helps them make the best-informed decisions at all times. It also has tools to automate tasks through AI agents. Originally, this software was developed for government use, but it expanded to the commercial sector within the past decade. Palantir has seen monster growth over the past few quarters, with Q2 posting the fastest growth yet: 48% year over year to $1 billion.

Alphabet is a legacy player and generates a ton of money from its Google family of products. While many are concerned that generative AI may replace Google Search, management has done a great job integrating AI with its AI search overviews, which provide a generative AI-powered summary of each search result. Google is still the dominant player in the search engine realm, and its Q2 revenue growth rate of 12% showcases this. Overall, Alphabet grew revenue at a 14% pace in Q2, which is far slower than Palantir.

With Alphabet’s much slower growth rate, how can I expect it to outperform Palatnir over the next decade?

Stock valuation plays a huge role in investing

Growth isn’t everything when investing. Even if it’s the best company in the world, it can turn out to be an investing failure if you pay the wrong price for it. That’s exactly where Palantir is right now, as it has unbelievable growth already baked into its stock price.

Palantir trades for a jaw-dropping 245 times forward earnings and 117 times sales.

PLTR PS Ratio data by YCharts

Compared to Alphabet’s 6.9 times sales and 21 times forward earnings, Palantir’s stock looks far more expensive. However, the question here is whether Alphabet’s solid, but slower growth, can outperform Palantir’s rapid growth, but at an expensive price tag? Let’s run the numbers.

Although Palantir grew revenue at a 48% pace in Q2, Wall Street analysts expect Palantir’s Q3 revenue growth to be 45% and 2026’s growth to be 35%. However, let’s give Palantir the benefit of the doubt and say it can grow at a 40% compounded annual growth rate (CAGR) for the first five years of this decade-long analysis and 15% after that. By the end of the decade, Palantir would have revenue of $37.2 billion. That’s over 10 times its current $3.4 billion it generated over the past 12 months. If Palantir could achieve a 35% profit margin, it would produce $13 billion in profits.

That’s an extremely bullish outlook for Palantir. The problem is that it doesn’t allow it to outperform Alphabet.

If we divide Palantir’s current market cap of $377 billion by 2035’s projected profits, we’d get a forward P/E of 28.9. Alphabet’s stock is priced at less than that now and it would have a decade of growth to push its current stock price higher.

The reality is, Palantir has at least five years, if not a decade, of growth already baked into the stock price. That’s not a positive sign for investors, and it’s why I think Alphabet can outperform Palantir over the next decade easily.

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Keithen Drury has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Palantir Technologies. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Palantir (NASDAQ: PLTR) has been one of the most explosive AI stocks to own over the past few years, rising 2,370% since the start of 2023. While some believe that Palantir can keep those returns up, I’m a bit more skeptical, and I think several companies will outperform Palantir, most notably is Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL).

It may seem a bit odd that I’m picking an established tech player to outperform one of the most exciting growth stocks over the next decade, but after digging into the numbers, it’s clear that Alphabet has a strong chance.

Palantir provides AI-powered data analytics software to its clients that helps them make the best-informed decisions at all times. It also has tools to automate tasks through AI agents. Originally, this software was developed for government use, but it expanded to the commercial sector within the past decade. Palantir has seen monster growth over the past few quarters, with Q2 posting the fastest growth yet: 48% year over year to $1 billion.

Alphabet is a legacy player and generates a ton of money from its Google family of products. While many are concerned that generative AI may replace Google Search, management has done a great job integrating AI with its AI search overviews, which provide a generative AI-powered summary of each search result. Google is still the dominant player in the search engine realm, and its Q2 revenue growth rate of 12% showcases this. Overall, Alphabet grew revenue at a 14% pace in Q2, which is far slower than Palantir.

With Alphabet’s much slower growth rate, how can I expect it to outperform Palatnir over the next decade?

Growth isn’t everything when investing. Even if it’s the best company in the world, it can turn out to be an investing failure if you pay the wrong price for it. That’s exactly where Palantir is right now, as it has unbelievable growth already baked into its stock price.

Palantir trades for a jaw-dropping 245 times forward earnings and 117 times sales.

Compared to Alphabet’s 6.9 times sales and 21 times forward earnings, Palantir’s stock looks far more expensive. However, the question here is whether Alphabet’s solid, but slower growth, can outperform Palantir’s rapid growth, but at an expensive price tag? Let’s run the numbers.

Story Continues