We recently compiled a list of the 10 Trending AI Stocks on Investors’ Radar. In this article, we are going to take a look at where Palantir Technologies Inc. (NASDAQ:PLTR) stands against the other AI stocks.
The US is struggling to keep its technology within its borders, a goal that the US government and most of the country are determined to achieve to maintain dominance, particularly in AI. In this regard, ChatGPT maker OpenAI has recently complained that its competitors, including those in China, are using its work to advance in developing their own artificial intelligence (AI) tools.
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Bloomberg reported that Microsoft, a major investor in OpenAI, is currently investigating whether any data belonging to the AI startup has been used in an unauthorized manner. White House “AI and crypto czar”, David Sacks, seems to agree with OpenAI’s allegations. Sacks suggested that DeepSeek may have used OpenAI’s models to get better, a process known as knowledge distillation.
“There’s substantial evidence that what DeepSeek did here is they distilled the knowledge out of OpenAI’s models. I think one of the things you’re going to see over the next few months is our leading AI companies taking steps to try and prevent distillation… That would definitely slow down some of these copycat models.”
-David Sacks
Nevertheless, DeepSeek’s AI models demonstrate how previous sanctions and export controls by the US have failed to curb competition. Investment firm Morgan Stanley, speaking of the broad market reaction on Monday following the emergence of DeepSeek’s cheaper and more efficient AI models, stated that the consequence may be a reduced spending interest or even tighter export controls.
“The DeepSeek release highlights evolutionary innovations in AI, some of which may be deflationary. That said, the stock market reaction is probably more important than the cause and could bring further export controls or reduce spending enthusiasm”.
It must be noted here that the technology behind DeepSeek’s r1 model Wall Street is raving over isn’t new, but what is surprising is the claim that it has been developed cheaply, and also using less powerful chips.
“The takeaway is that there are many possibilities to develop this industry. The high-end chip/capital intensive way is one technological approach. But DeepSeek proves we are still in the nascent stage of AI development and the path established by OpenAI may not be the only route to highly capable AI.”
-Xiaomeng Lu, director of Eurasia Group’s geo-technology practice.
That said, the road ahead for AI development looks enticing, and AI scientists broadly agree that these new developments are a positive step for the industry as a whole.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
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 275% since May 2014, beating its benchmark by 150 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 Holders: 43
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems. On January 30, Jefferies analyst Brent Thill maintained a “Sell” rating on Palantir Technologies and set a price target of $28.00. While the analyst has acknowledged that the technology giant’s fundamentals remain robust, he has also forecasted a 65% stock price drop in the coming 12 months. Not everyone is pessimistic about Palantir’s stock, however. On January 23, Wedbush Securities maintains its “Outperform” rating on the stock, demonstrating confidence in the company’s artificial intelligence (AI) strategy. The analyst told investors in a research note that even though Palantir’s valuation is expensive today, the “Messi of AI,” is going to be a major winner in the trillions of AI spend over the next few years.
Overall PLTR ranks 8th on our list of the trending AI stocks on investors’ radar. While we acknowledge the potential of PLTR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. 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.