We recently published a list of Top 10 Stocks to Watch as AI Trade Dynamics Change. In this article, we are going to take a look at where Palantir Technologies Inc. (NASDAQ:PLTR) stands against other top stocks to watch as AI trade dynamics change.
Aswath Damodaran from NYU Stern School of Business said in a recent program on CNBC that AI “buzzwords” are not boosting the market anymore as investors grow more concerned about capital spending.
“I’ve said about data centers we’ve gotten way ahead of the game. I mean, the AI product and service business, which ultimately is what has to pay for all of this, has not taken off in any substantial way. I’m hard-pressed to think about any company making significant money from the AI product and service business.”
Damodaran said that the “sobering” of the AI trade started in September last year and the DeepSeek breakthrough in China also had an impact on the industry.
“It’s part of, I think, what you see almost every buzzword in history in the last four decades. I call these the ‘bar mitzvah moment,’ where people wake up and say, ‘Okay, there’s a lot of promise here, but show me something that I can hang my hat on.’”
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For this article, we picked 10 stocks Wall Street analysts have been talking about lately. With each stock, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A software engineer manipulating a vast network of code on virtual monitors.
Palantir Technologies Inc (NASDAQ:PLTR)
Number of Hedge Fund Investors: 41
Aquiles Larrea from Larrea Wealth Management said in a recent program on Schwab Network that he’s bullish on Palantir Technologies Inc (NASDAQ:PLTR) and thinks the stock can reach $100.
“The first thing being, okay, we had the government cuts, that’s affected the stock somewhat. It came down from about 115 or so, and that’s flirting right now with right below 90, basically. But more importantly, is that they are uniquely positioned in their particular area of AI, that we could see that stock be more than 115. As a matter of fact, I’ve come on, I’ve been following this stock, I first recommended it last January here on this network at 7, did very well yet last year, 17 bucks it was at. So I foresee that we still have a lot more, you know, think about this sector, it’s in its infancy, so there’s a lot more potential opportunity here, but it’s not going to be as fast, because right now, everything is starting to slow down in the sector. We’re starting to see productivity come down, we’re starting to see the economy pull. So we could see the next target for this particular stock at about 100, 101 right now.”
Baron Asset Fund stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q4 2024 investor letter:
“Two software stocks that the Fund did not own, Palantir Technologies Inc. (NASDAQ:PLTR) and AppLovin Corporation, each gained more than 100% and accounted for 52% of the Benchmark’s gain during the quarter. At year end 2024, Palantir was valued at approximately 200 times its expected 2024 earnings, while AppLovin was valued at 80 times. The market cap of each exceeded $100 billion, and the two stocks represented nearly 8% of the Index. Neither company met our criteria for investment. The total impact on relative performance from Palantir and AppLovin was about 7 times higher than we have seen historically for two securities that are unique to the Benchmark, showing just how unparalleled the event was and something that we believe is unlikely to be repeated.”
Overall, PLTR ranks 9th on our list of top stocks to watch as AI trade dynamics change. While we acknowledge the potential of PLTR, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
