We recently published a list of Top 10 AI News You Shouldn’t Miss. In this article, we are going to take a look at where Palantir Technologies Inc. (NASDAQ:PLTR) stands against other top AI news you shouldn’t miss.
All everyone could talk about in the technical AI landscape these days is DeepSeek-R1, a Chinese open-source LLM that analysts believe can give major American AI companies a run for their money. Why is DeepSeek making waves and why is it called a breakthrough in the AI race?
DeepSeek AI model is several times cheaper to use for professional purposes when compared to its American counterparts including OpenAI’s o1 model. Media reports also suggest the model beat almost all key AI models in the industry by significant margins.
CNBC’s Deirdre Bosa explained what makes these Chinese models a challenge for US tech companies:
“The cost, I mean, these models coming out of China are just built at a fraction of the price when you think about OpenAI. That’s spending $5 billion a year, burning through billions of dollars a year. These models, the DeepSeek for example, they say they built it for less than $6 million. ByteDance as well, you know, shows that it was built and you can access it at much, much lower prices. So, this really turns on sort of this truth that we have thought about generative AI for the last few years—that you need hundreds of millions of dollars to develop bigger and better models. What the Chinese labs and companies are doing is they’re going straight to the frontier. They’re building with sort of infrastructure and outputs that are already out there, built in many cases by American companies and startups, and they’re improving on it, they’re innovating on it, and producing models that are just as good, in some cases, at a fraction of the cost.”
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For this article, we picked 10 AI stocks currently in the news. With each company 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Investors: 43
Jim Cramer in a recent program on CNBC praised Palantir Technologies Inc. (NASDAQ:PLTR) and its management and said the stock may turn out to be undervalued in the long term because of its growth.
“I have growing respect for what the company’s trying to do, and I think that even though it seems 100 times earnings, it may turn out to be much less in terms of the multiple. It is the highest—got the highest so-called rule of 40 about its growth and margins of any company. My hats off to these guys. If you go back and read the last couple of analyst reports, it really is the exciting AI company of our era.”
Cramer also appreciated Palantir Technologies (NASDAQ:PLTR) CEO Alex Karp:
“I think what really is, this is a very, very high-growth company, and we really don’t know how to value it. We don’t know how to value it because Alex Karp, the CEO, is basically saying, “Listen, our valuation is confused. We’re the fastest growing, but we’re not really going to tell you everything that we do.” I am a believer in Alex Karp. I ordered his book, I’ve read a lot, I’ve seen his videos, and I think that what he’s got here is something that is much more special.”
ClearBridge Growth Strategy stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q4 2024 investor letter:
“To promote balance, manage risk and augment the portfolio’s growth characteristics, we continued to take profits in some of our more established, larger holdings to seed new purchases. We believe that the arms race and value unlock from AI will provide a multiyear tailwind to a number of companies in our coverage. To maintain exposure to this theme, we used some of our profit taking in Broadcom to initiate new positions in AI-levered names AppLovin and Palantir Technologies Inc. (NASDAQ:PLTR).
Palantir is a software-as-a-service provider with an AI-powered operating system that connects data to existing customer applications. Palantir’s platform acts as a hub to improve business outcomes across government and commercial end markets, allowing users to synthesize diverse data sources into actionable insights in real time. The company is highly profitable and growing rapidly at scale with 80%+ gross margins. Given the stock’s more elevated valuation we are being mindful of position size.”
Overall, PLTR ranks 10th on our list of top AI news you shouldn’t miss. 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.