PALANTIR TECHNOLOGIES STOCK
Palantir Technologies, the data analytics powerhouse, stands as a stalwart in the AI race, meeting the information & analysis demands of private companies and governments. The company’s recently launched AIP (Artificial Intelligence Platform) has made significant strides, particularly in securing lucrative government contracts, which serve as a stabilizing force for the company’s revenue stream during uncertain periods.
Palantir made headlines after securing a $250 million contract with the U.S. Army until 2026 to conduct advanced tests on AI and machine learning capabilities.
The company solidified its standing through strategic alliances with CAZ Investments and PwC, culminating in enhanced data analytics and AI-powered solutions. Palantir rounded off the quarter with a cash balance of $3.3 billion and an adjusted free cash flow of $141 million, underscoring its financial robustness.
Despite this, Jefferies Financial Group recently downgraded Palantir stock to “sell”, expressing skepticism over AI hype inflating the stock’s valuation. Analysts at the firm also opine that while AI holds promise, Palantir will require time to realize substantial revenue from it. Revenue and earnings are forecasted to grow by 20% and 19% respectively in 2024, yet Palantir appears overvalued, trading at 54 times forward 2024 earnings.
Nonetheless, Palantir’s AI-powered solutions serve as potent growth factors. Should the company substantiate its lofty valuation with significant revenue growth in the coming years, it retains its appeal as a growth pick.
What is Wall Street’s View on Palantir Stock?
Wall Street’s opinion on Palantir stock is a mixed bag, yielding a consensus “hold” rating. Out of 14 analysts covering PLTR, 2 classify it as a “strong buy,” 1 recommends a “moderate buy,” and 4 rate it a “hold.” Meanwhile, 2 analysts rate it as a “moderate sell,” and 5 as a “strong sell.”
Moreover, Palantir’s stock has soared past its mean target price of $14.65. While its high target price of $25 suggests a 49.5% upside potential over the ensuing 12 months, it remains embroiled in a confluence of conflicting perspectives.
META PLATFORMS STOCK
Meta Platforms, renowned for its social media prowess, including Facebook, WhatsApp, Instagram, and Messenger, has underpinned its business fundamentals.
Meta’s extension beyond the realms of social media into an expansive digital ecosystem has unfurled numerous growth prospects. From virtual social gatherings to immersive gaming experiences and e-commerce integrations, Meta is steadfast in its pursuit of cultivating a unified network where users invest more time in interacting with its suite of products and services.
Meta’s Stellar Q3 Performance Indicates Sustained Growth and AI Investment
Meta, formerly known as Facebook, enjoyed a robust third quarter performance, witnessing a remarkable 23% increase in revenue to $34.1 billion, accompanied by a staggering 168% surge in diluted earnings per share (EPS) to $4.39. The company’s Family of Apps (FoA) segment, which includes its social media platforms, recorded a 24% revenue growth and an 87% increase in operating income during the same period.
Strong Revenue Growth and AI Investments
Meta’s revenue growth was propelled by an impressive 23% increase in advertising revenue, reaching $33.6 billion during the quarter. This upward trajectory is further solidified by CEO Mark Zuckerberg’s commitment to prioritize AI investments, as demonstrated at the September Connect Conference where the company unveiled its AI offerings, including Quest 3, AI-powered Ray-Ban smart glasses, and the AI Studio platform.
Despite heavy investments in AI and the metaverse, Meta concluded the third quarter with a substantial free cash flow (FCF) balance of $13.6 billion, reflecting the company’s balanced approach to innovation and fiscal discipline.
Potential for Record-Breaking Year in 2024
Industry analysts anticipate Meta to continue its growth momentum, projecting a 13% year-over-year revenue increase to $151 billion in 2024. Furthermore, earnings are expected to surge to $17.40 in 2024, signifying a remarkable 21% rise from the previous year, underlining the company’s promising trajectory for the future.
Analysts’ bullish sentiment is corroborated by their predictions of Meta generating over $60 billion in FCF for 2024, which could potentially propel its stock to reach $473. Currently trading at approximately 20 times projected 2024 earnings, Meta’s stock valuation appears reasonable, especially in light of its significant AI prospects in the years ahead.
Wall Street Ratings and Target Price
With regards to Meta Platforms stock, Wall Street analysts exhibit an overwhelmingly positive outlook, bestowing a “strong buy” rating on the company. Out of the 41 analysts covering the stock, 37 advocate a “strong buy,” while the remaining ratings comprise of a “moderate buy,” two “hold” recommendations, and one “strong sell” rating. The average target price for META stands at $386.24, signaling an 8.9% upside potential from current levels.
META or PLTR: Which is the Best AI Growth Stock?
When comparing Meta with Palantir, the former emerges as the favorable long-term choice, given its tremendous growth potential in the AI and metaverse domains. Meta’s expansion prospects encompass a wide array of applications, ranging from social networking to immersive experiences, e-commerce, and beyond. As a result, Meta’s anticipated stellar performance in 2024 could drive its stock to the Street-high target price of $435, translating to a substantial 22.6% upside potential over the next 12 months.