We recently published a list of 10 Best AI Stocks to Buy According to Reddit. In this article, we are going to take a look at where Palantir Technologies Inc. (NASDAQ:PLTR) stands against other best AI stocks to buy according to Reddit.
On December 4, Jay Jacobs, US Head of Thematics and Active Equity ETFs at BlackRock appeared on CNBC and discussed the significant growth potential for ETFs as we approach 2025, particularly in the context of the accelerating AI infrastructure phase. He noted that while AI adoption is still in its early stages, substantial investments, amounting to around $250 billion annually from major tech companies, are being made to enhance data centers and develop advanced chips. This investment is crucial for making AI more integrated into everyday life and business applications.
Jacobs emphasized that the opportunity in AI extends beyond just mega-cap tech stocks; it encompasses a broader value chain that includes semiconductor and software companies. He mentioned specific ETFs like ARTY (an index-based artificial intelligence fund) and BAI (an actively managed fund) that aim to capture this growth. Additionally, he highlighted the increasing importance of cybersecurity as data becomes more valuable, suggesting that companies will invest more in protecting their data assets. This trend is reflected in ETFs such as IHAK, which focuses on cybersecurity firms benefiting from this heightened demand.
Dave Nadig, an ETF expert and Financial Futurist, added insights on how AI will shape ETF investing by pointing to the infrastructure needs that arise from increased energy consumption driven by AI technologies and electric vehicles. He noted that companies involved in power generation and utilities are becoming increasingly relevant as they adapt to rising electricity demands. Both experts agreed on the critical role of physical infrastructure in supporting technological advancements, emphasizing that real-world resources like energy and materials are essential for the ongoing development of AI technologies.
Dan Ives, Global Head of Technology Research at Wedbush Securities, also believes the tech market is set for significant growth driven by advancements in AI. He expects AI software companies to play a key role in this expansion, as he mentioned in a CNBC interview on November 25. We discussed this in our article about the 12 Best Artificial Intelligence Stocks To Invest In Under $10, here’s an excerpt from it:
“…Ives believes that the consumption model in enterprise AI, driven by advancements from major chipmakers, will lead to underestimated growth rates of 15% to 20% for these software companies.
Ives also addressed the impact of bond yields and currency strength on the tech trade, noting that while these factors could present headwinds, they are already factored into market guidance. He expressed confidence in a strong demand perspective that could propel the NASDAQ to 20,000 in the next two years, with aspirations for it to reach 25,000 thereafter…”
Our Methodology
We first sifted through Reddit threads to compile a list of the top AI stocks. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 data analytics and AI company that specializes in providing powerful tools to government agencies. Through AI, it enables these agencies to analyze massive datasets, uncover hidden patterns, and make informed decisions.
Its AI-driven solutions are being used to transform several industries, such as defense, healthcare, and finance. For example, the company’s platform has helped organizations reduce underwriting response times from over two weeks to three hours, increase on-time delivery rates from 40% to 90%, and optimize supply chain operations, which has led to a $30 million impact on the bottom line.
The company’s US business achieved an impressive 44% year-over-year revenue growth in Q3 2024, fueled by increased adoption of AI-powered solutions. The overall revenue improved by 29.98%. It closed 104 deals, each of which was over $1 million, together with a 77% year-over-year increase in customer count. By prioritizing AI integration and delivering tangible results, Palantir Technologies Inc. (NASDAQ:PLTR) is well-positioned to maintain its leadership in the data analytics and AI market.
Carillon Scout Mid Cap Fund stated the following regarding Palantir Technologies Inc. (NYSE:PLTR) in its first quarter 2024 investor letter:
“The top contributor to return for the quarter was Palantir Technologies Inc. (NYSE:PLTR). Sentiment improved on Palantir after it reported stronger than expected commercial customer revenue and free cash flow. U.S. commercial growth was especially encouraging, as U.S. commercial revenue was up by a large percentage year over year for the fourth quarter and U.S. commercial customer count grew nearly as much. We expect Palantir to become one of the premier artificial intelligence (AI) software providers, built on its Foundry and AIP platforms.”
Overall, PLTR ranks 2nd on our list of best AI stocks to buy according to Reddit. As we acknowledge the growth potential of PLTR, our conviction lies in the belief that AI stocks hold great promise for delivering high 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.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock
Disclosure: None. This article is originally published at Insider Monkey.