In the thrilling world of finance, artificial intelligence (AI) stocks often play starring roles, setting the stage ablaze with their meteoric ascents. Similar to the exhilarating right-sided surge of a parabolic curve, companies such as Nvidia (NASDAQ: NVDA) have captivated investors with their astonishing growth. Nvidia, for one, has witnessed a staggering 439% jump in its stock price since the dawn of 2023, a feat that exemplifies the parabolic trajectory many AI-focused entities are riding.
While Nvidia shines brightly in the constellation of AI stocks, the likes of Advanced Micro Devices (NASDAQ: AMD) and Palantir Technologies (NYSE: PLTR) are amassing their own fervent followings. Let’s delve into the reasons behind the potential parabolic journey awaiting these two AI juggernauts.
Advanced Micro Devices: The Rising Titan
Following Nvidia’s spirited performance in its Q4 fiscal 2024 results unveiled on Feb. 21, all eyes were on the AI chip market. Nvidia’s relentless growth fueled by AI prowess underscored a burgeoning demand that outstrips its supply. With waiting times stretching into months for its flagship H100 AI chip, the hunt for alternatives becomes inevitable. This is where Advanced Micro Devices seizes the spotlight.
Originally forecasted to rake in $2 billion from AI chip sales in 2024, AMD has boldly revised its estimates to a whopping $3.5 billion. The company’s strategic partnership with chip giant Taiwan Semiconductor Manufacturing (TSMC) heralds a pivotal moment in its ascent, with TSMC doubling its advanced chip-packaging capacity by late 2024, an almost mythical feat compared to its previous metrics. Riding on this wave, AMD is poised to stake a more substantial claim in the AI chip market, potentially outstripping Wall Street’s conservative forecasts.
As analysts project a 37% earnings surge in 2024 to $3.64 per share for AMD, followed by a resounding 50% leap in the subsequent year to $5.46 per share, investors stand at the cusp of a tantalizing opportunity to ride the semiconductor wave into realms unseen.
Palantir Technologies: The AI Maverick
In the whirlwind that is the stock market, Palantir Technologies emerges as a beacon of promise in the AI domain. With a breathtaking 37% surge in its stock price post the Q4 2023 earnings release on Feb. 5, Palantir is the dark horse in the AI arena, ready to charge forth on a parabolic sprint.
A pivotal player in the AI universe, Palantir’s Artificial Intelligence Platform (AIP) has become the linchpin of its recent success. Boasting a manifold increase in deals worth $1 million or more year-over-year, Palantir’s commercial revenues witnessed a resounding 32% spike, eclipsing the overall revenue growth of 20% in Q4. A telling testament to its clients’ growing faith, the company’s top 20 customers now spend an average of $55 million per annum, a testament to the escalating allure of Palantir’s offerings.
With the total value of future contracts crossing the $1 billion threshold, Palantir is primed for exponential growth. In a market set to burgeon from $64 billion in 2022 to a staggering $251 billion in 2027, Palantir stands at the vanguard of the AI software revolution, poised for unfathomable expansion.
Given analysts’ assertive projections of an 85% annual earnings surge over the next five years for Palantir, a stark contrast to the modest 2% growth seen in the preceding five years, investors are beckoned to partake in the AI dalliance that Palantir promises.
As the curtains rise on this era of incredible potential and untapped growth, investors find themselves at the cusp of an AI revolution that promises to reshape industries, redefine markets, and engender a financial landscape brimming with promise.
Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, Palantir Technologies, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
