$100 Million Opportunity or Overvalued Stock?

We recently published a list 20 AI News and Analyst Reviews You Shouldn’t MissIn this article, we’ll look at where Palantir Technologies Inc. (NYSE:PLTR) stands against other AI news and analyst ratings you shouldn’t miss.

The artificial intelligence (AI) market continues to grow at a tremendous pace, with significant advances across industries. According to a McKinsey report on the AI ​​industry, the AI ​​revolution is driving innovation across industries, with investment in AI increasing sevenfold in recent years despite economic downturns in other technology sectors. This growth is primarily driven by the increasing demand for AI applications in data analysis, content creation, and predictive modeling. In particular, productive AI has attracted the most attention, revolutionizing industries such as marketing, customer service, and product design. Moreover, high-performing companies are investing heavily in AI to stay ahead of the competition. These companies, often referred to as AI high-performers, allocate a significant portion of their digital budgets (more than 20%) to AI technologies. They prioritize AI not only for cost reduction purposes, but also as a source of new revenue.

To learn more about these developments, access: The 33 Most Important Artificial Intelligence Companies You Should Pay Attention To And 20 Industrial Stocks Riding the AI ​​Wave.

The market for AI applications is expected to expand further, with various industry reports predicting that AI could contribute up to $13 trillion to the global economy by 2030. Over the next decade, informed estimates from investment advisors at Goldman Sachs suggest that these AI tools could lead to a 7% increase in global GDP, worth around $7 trillion, and boost overall productivity growth by 1.5 percentage points. What’s more, the bank expects established businesses worldwide to spend around $1 trillion on developing AI infrastructure in the coming years.

Leading businesses have taken note of these developments. Recent reports suggest that investment giant BlackRock is likely to launch a $30 billion+ fund focused on AI in partnership with tech giants. The fund will invest in AI infrastructure to build data centers and energy projects. Energy demand is of particular concern to businesses as AI models require significant amounts of computing power, leading to higher energy consumption.

The sheer scale of computing power required for AI workloads has also forced tech giants to build supercomputer clusters, combining expensive chips, cooling systems, networking tools, and other high-tech hardware to process data. These AI data centers will likely consume increasing amounts of energy as AI use cases expand. McKinsey estimates that 15% to 20% of all data center workloads will be driven by AI by 2025, up from less than 5% in 2020. And if current growth trends continue, AI data centers could meet 13% of global electricity demand by 2030, according to a report from the International Energy Agency. That’s why tech giants are investing billions of dollars to expand their AI infrastructure.

Our methodology

For this article, we selected AI stocks based on the latest news and analyst ratings. These stocks are also popular among hedge funds.

Why do we care about the stocks hedge funds invest in? The reason is simple: Our research has shown that we can outperform the market by mimicking the best stock picks of the best hedge funds. Our quarterly newsletter’s strategy picks 14 small- and large-cap stocks each quarter, and has returned 275% since May 2014, outperforming its index by 150 percentage points (see more details here).

A software engineer who processes a large web of code on virtual monitors.

Palantir Technologies Inc. (NYSE:PLTR)

Number of Hedge Fund Owners: 44

Palantir Technologies Inc. (NYSE:PLTR) builds and distributes software platforms to assist the intelligence community with counterterrorism investigations and operations. It also provides software to commercial customers such as banks and hospitals. The company recently announced that it has won a $100 million contract from the U.S. Army to streamline its AI infrastructure capabilities. The contract, awarded by the DEVCOM Army Research Laboratory, expands Maven Intelligent System access to the Army, Air Force, Space Force, Navy and U.S. Marine Corps. Under the agreement, a Palantir platform will support AI battlespace awareness, global integration, force management, logistics, joint fires and targeting workflows.

Citi analyst Tyler Radke recently sat down with Palantir Technologies Inc. (NYSE:PLTR) CFO Dave Glazer and penned a research note for investors after the meeting. The note reiterated a Neutral rating on the stock with a $30 price target. The analyst told investors that he remains bullish on the company’s AI Platform momentum with steady macro commentary. However, the software company’s recent inclusion in the S&P 500 Index saw the stock jump 15%, putting its valuation among the most expensive names in software at 25 times the company’s 12-month enterprise value/sales ratio.

General PLTR It ranks 9th Our list of must-see AI news and analyst ratings. While we recognize PLTR’s potential as an investment, we believe that some AI stocks hold greater promise to deliver higher returns and do so in a shorter time frame. If you’re looking for an AI stock that’s more promising than PLTR but trades at less than 5 times earnings, check out our report cheapest AI stock.

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Disclosure: None. This article was originally published on Insider Monkey.