We recently published a list of 20 AI News and Analyst Ratings You Can’t MissIn this article, we’ll take a look at where Palantir Technologies Inc. (NYSE:PLTR) stands in relation to other can’t-miss AI news and analyst ratings.
The artificial intelligence (AI) market continues to experience tremendous growth, with significant advances across all industries. According to a McKinsey report on the AI industry, the AI revolution is driving innovation across all industries, with investment in AI increasing sevenfold in recent years, despite economic downturns in other technology sectors. This increase is primarily fueled by the growing demand for AI applications in data analytics, content generation, and predictive modeling. Generative AI in particular has garnered the most attention, revolutionizing industries such as marketing, customer service, and product design. Furthermore, high-performing companies are investing heavily in AI to gain a competitive edge. Often referred to as AI high performers, these companies are allocating a significant portion of their digital budgets—over 20%—to AI technologies. They are prioritizing AI not only for cost reductions, but also for new revenue streams.
Read more about these developments by going to 33 Top AI Companies to Watch Out For And 20 Industrial Stocks Already Riding the AI Wave.
The market for AI applications is expected to grow even further, with various industry reports predicting that AI could contribute up to $13 trillion to the global economy by 2030. Over the next decade, educated estimates from investment advisors at Goldman Sachs suggest that these AI tools could drive a 7% increase in global GDP, worth nearly $7 trillion, and boost productivity growth by 1.5 percentage points overall. Furthermore, the bank expects established companies around the world to spend nearly $1 trillion on developing AI infrastructure in the coming years.
Prominent companies have taken notice of these developments. Latest reports suggest that investment giant BlackRock, in partnership with tech giants, is likely to launch a $30 billion-plus fund focused on AI. The fund will invest in artificial intelligence infrastructure to build data centers and energy projects. The need for energy is a source of particular interest to businesses, as AI models require significant computing power, leading to higher energy consumption.
The sheer scale of computing power required for AI workloads has also forced tech giants to build supercomputing clusters, stringing together expensive chips, cooling systems, networking tools and other high-tech equipment to crunch data. These AI data centers are likely to consume increasingly more energy as AI use cases expand. McKinsey estimates that 15% to 20% of all data center workloads will be AI-powered by 2025, up from less than 5% in 2020. Furthermore, according to a report from the International Energy Agency, AI data centers could account for as much as 13% of global electricity demand by 2030 if current growth trends continue. As a result, tech giants are investing billions of dollars in expanding 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 are we interested in the stocks that hedge funds are investing 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 strategy selects 14 small-cap and large-cap stocks each quarter and has delivered a 275% return since May 2014, outperforming its benchmark by 150 percentage points (see more details here).
A software developer manipulating a vast network of code on virtual monitors.
Palantir Technologies Inc. (NYSE:PLTR)
Number of hedge fund holders: 44
Palantir Technologies Inc. (NYSE:PLTR) builds and deploys software platforms for the intelligence community to assist in counterterrorism investigations and operations. It also provides software to commercial customers such as banks and hospitals. The company recently announced that it had won a $100 million contract from the U.S. Army to streamline the latter’s AI infrastructure capabilities. The contract, awarded by DEVCOM Army Research Laboratory, extends access to the Maven Smart System to the Army, Air Force, Space Force, Navy and U.S. Marine Corps. Under the deal, a Palantir platform would support AI battlespace awareness, global integration, force management, logistics, joint fires and targeting workflows.
Citi analyst Tyler Radke recently met with Palantir Technologies Inc. (NYSE:PLTR) CFO Dave Glazer and wrote a research note to investors following the meeting. The note reiterated a neutral rating on the stock with a $30 price target. The analyst told investors the company remained optimistic about the momentum of its Artificial Intelligence Platform with consistent macro commentary. However, the analyst said the software company’s recent inclusion in the S&P 500 Index drove the stock up 15%, raising the company’s valuation to one of the most expensive names in software at 25 times enterprise value to revenue over the next 12 months.
General PLTR is in 9th place on our list of must-read AI news and analyst ratings. While we recognize PLTR’s potential as an investment, our conviction is based on the belief that some AI stocks offer a better chance of delivering higher returns, and in a shorter time frame. If you’re looking for an AI stock that shows more promise than PLTR but trades at less than 5x earnings, check out our report on the cheapest AI stocks.
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Disclosure: None. This article was originally published on Insider Monkey.