Nasdaq’s Anticipated Surge in 2024: Top AI Stock to Buy
The investment landscape of 2022 (Top AI Stock to Buy) posed significant challenges, with the Nasdaq Composite experiencing a steep decline. However, a striking comeback is unfolding, with the Nasdaq rising notably in 2023, signaling a positive shift.
Historical data suggests this upswing is likely to persist. Over the past 50 years, the year following a market recovery typically sees an additional 19% gain for this tech-centric index.
A key driver behind this rejuvenation is the advancements in AI technology. Unlike earlier iterations, the latest AI developments are benefiting a wide range of industries through enhanced productivity. Palantir Technologies (PLTR -1.19%) is a prime example of a company capitalizing on this trend, making it an attractive prospect for investors.
In-depth AI Experience
AI, though spotlighted recently, has been gradually evolving. Palantir, although publicly traded only since September 2020, was founded in 2003 by PayPal co-founder Peter Thiel. Originating in the aftermath of the 9/11 attacks, Thiel’s vision was to create tools for U.S. law enforcement and intelligence agencies, enabling them to uncover patterns in vast data sets, thereby increasing preventive measures against future threats. This technology proved invaluable to the U.S. government and its allies.
Crucially for investors, Palantir’s innovations also have profound implications for the business sector. The company developed a system parallel to its government-focused tools, concentrating on business analytics and data mining, thus replicating its success in the commercial domain.
Advancing into Next-Gen AI
The introduction of ChatGPT in late 2022 marked a watershed moment for generative AI, sparking widespread interest. These AI models can create original content, summarize data, draft and edit code, among other capabilities, heralding substantial productivity enhancements. Palantir’s extensive experience positions it well to meet the surging demand.
While AI’s future scope is uncertain, conservative estimates from Morgan Stanley and Goldman Sachs project a market worth between $6 trillion and $7 trillion by 2030. Ark Investment Management’s Cathie Wood presents a more optimistic view, forecasting AI software spending to reach $14 trillion by decade’s end.
For Palantir, this represents an immense opportunity to develop new revenue streams through generative AI.
Financial Performance Insights
Palantir’s recent financial results reflect its growing trajectory. The company reported a 17% year-over-year revenue increase to $558 million in the third quarter, with commercial revenue growth outpacing government revenue. This led to an earnings per share (EPS) increase, alongside consecutive quarters of GAAP profitability – a record achievement in its 20-year history.
Notably, Palantir’s potential inclusion in the S&P 500 in 2024 could further boost its stock value.
Driving these results is the burgeoning demand for Palantir’s Artificial Intelligence Platform (AIP), released in the second quarter. The AIP allows businesses to integrate generative AI with their existing systems, and the demand for it is unprecedented in Palantir’s history.
Top AI Stock to Buy: Investment Considerations
Palantir’s stock has seen a remarkable increase in 2023, attributed to its escalating profitability and burgeoning AI expertise.
Investors looking to capitalize on the AI revolution should consider the potential of Palantir Technologies. However, it’s crucial to note that despite Palantir’s impressive performance, it was not listed among the top 10 stocks recommended by The Motley Fool Stock Advisor’s analyst team. This underscores the importance of thorough research and diversified investment strategies in navigating the dynamic tech investment landscape.
