We recently published a list of 16 trending AI stocks according to the latest analyst ratings and newsIn this article, we take a look at how Palantir Technologies Inc. (NYSE:PLTR) compares to other trending AI stocks.
In recent months, the AI industry has offered explosive opportunities in the development and deployment of AI infrastructure. Companies that provide AI chips, cloud services, and data storage solutions will benefit from the growing demand for AI capabilities. For example, NVIDIA, a leading AI chip provider, has seen its stock price rise by 160% in 2024, driven by the rising need for powerful processing capabilities in AI applications. Similarly, cloud service providers such as Amazon Web Services and Microsoft Azure are seeing a surge in demand for their AI and machine learning services, making them attractive options for investors.
For more information on these developments, see Top 33 AI companies to watch out for And 20 industrial stocks that are already riding the AI wave.
However, amidst all the hype surrounding new technology, investors should also pause and consider some of the risks and challenges associated with AI. Regulatory scrutiny of AI companies is increasing, particularly around issues of data privacy, algorithmic bias and the ethical use of AI. Governments around the world are beginning to enact regulations that could impact the development and deployment of AI technologies. For example, the European Union has proposed an AI law that would create a regulatory framework that addresses the risks associated with AI while encouraging innovation. This regulatory environment could lead to higher compliance costs and slower adoption rates in certain sectors, posing a potential risk to investors.
Another important consideration for investors is the skills shortage in the AI industry. The demand for skilled AI professionals far exceeds the supply, resulting in fierce competition among companies for the best talent. This skills shortage could slow down the development and deployment of AI technologies, especially among smaller companies that may not have the resources to compete for talent with tech giants like Google and Microsoft. Despite these challenges, the overall outlook for the AI industry remains extremely positive. The continued advancements in AI technologies, as well as their increasing integration into various sectors, provide a solid foundation for future growth.
For more information on these developments, see Billionaire Stan Druckenmiller invests in AI infrastructure, tobacco and industrial stocks And 10 tech stocks to watch amid market volatility, according to Bernstein analyst.
Our methodology
For this article, we selected AI stocks based on the latest news and analyst ratings. These stocks are also popular with 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 top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (read more details here).
Palantir Technologies Inc. (NYSE:PLTR)
Number of hedge fund owners: 44
Palantir Technologies Inc. (NYSE:PLTR) develops and implements software platforms for intelligence agencies to assist in counterterrorism investigations and operations. Shares have been on a bullish streak this year, rising more than 120% year-to-date, outperforming the benchmark S&P 500 index by nearly 100%. The company’s second-quarter earnings were strong and showed sustained growth. This growth is driven by AI-powered platforms for advanced data integration and analytics, aimed at the government and commercial sectors. With these platforms, the company has gained traction among corporate investors, both public and private.
Analysts on Wall Street have noticed the new developments at Palantir Technologies Inc. (NYSE:PLTR). Northland recently initiated coverage on the stock with a Market Perform rating and a $35 price target, noting that the company’s artificial intelligence operating system based on Ontology software has overcome countless barriers to adoption and is boosting the use of AI across the enterprise landscape.
Overall, PLTR 9th place on our list of trending AI stocks with the latest analyst ratings and news. While we recognize the potential of Palantir Technologies Inc. (NYSE:PLTR) as an investment, we believe some AI stocks promise higher returns and do so in a shorter time frame. If you are looking for an AI stock that is more promising than Palantir Technologies Inc. (NYSE:PLTR) but trades at less than 5 times its earnings, read our report on the cheapest AI stock.
READ MORE: Michael Burry is selling these shares And Jim Cramer recommends these stocks.
Disclosure: None. This article was originally published on Insider Monkey.
