Artificial intelligence (AI) has become a formidable presence in today’s economy, reshaping lives globally and capturing the interest of seasoned and novice investors alike.
When considering investments in AI-driven companies, it is crucial to evaluate factors beyond technological prowess, such as market positioning, competitive advantages, and scalability. Palantir (NYSE: PLTR) and Meta Platforms (NASDAQ: META) stand out as companies worthy of consideration.
If fortunes align favorably, these companies hold the potential to generate substantial returns and sow the seeds of enduring generational wealth. Let’s delve into the reasons why.
A Glimpse at Palantir
Palantir Technologies, a pioneer in data mining software and machine learning, has recently witnessed a remarkable upsurge in its stock price, surging by almost 40% following the release of its fourth-quarter earnings on Feb. 5.
Initially renowned for its work with government agencies in thwarting threats, Palantir’s commercial segment is now gaining momentum. While government contracts currently contribute 53% of its revenue, the company is shifting towards commercial ventures. This strategic move is set to enhance Palantir’s margins, given the flexibility in pricing and reduced regulatory complexities compared to governmental projects. By tailoring industry-specific solutions for various sectors like healthcare, banking, and automotive, Palantir has carved a niche for itself, fostering robust client relationships and ensuring customer loyalty.
Palantir’s customer base is expanding steadily, fueled by the swift adoption of the Artificial Intelligence Platform (AIP), a generative AI-powered software suite. Through its Bootcamp approach, the company has simplified the onboarding process for customers, hastening the conversion of engagements into valuable partnerships. With a revenue mix favoring commercial pursuits, fortified client ties, and a successful software suite, Palantir emerges as a promising long-term investment.
Unlocking the Potential of Meta Platforms
Meta Platforms, the parent company of social media giants Facebook, Instagram, and WhatsApp, has undergone a remarkable turnaround, witnessing a staggering 450% surge from its recent low in November 2022. This resurgence can be attributed to Meta’s emphasis on harnessing AI technologies to enhance user engagement, refine ad targeting, and streamline operational costs.
With digital ad spending projected to grow by 7.2% year over year to $913 billion in 2024, Meta is poised to benefit significantly from the surge in demand for digital advertising formats. The company’s massive reach, extending to 3.2 billion daily users across its platforms, positions Meta strongly in the digital advertising landscape. The prevalence of Reels, Meta’s short-form video format, is driving engagement on Instagram and Facebook, with 3.5 billion daily shared Reels, paving the way for substantial revenue from Reels ads in the future.
Meta’s AI-powered recommendations system enhances user interaction by curating personalized content, while its AI and ML tools empower advertisers to craft targeted campaigns and measure performance effectively. These initiatives have propelled Meta’s financial performance, evident in increased ad impressions and average ad prices in the last quarter of 2023.
Although Meta’s Reality Labs division remains a financial drain, the company’s gains from social media advertising offset these losses. Trading at 24.8 times forward 2024 earnings, Meta Platforms presents an alluring investment opportunity considering its robust fundamentals, growth prospects, and relative valuation.
Hence, hinging on its sturdy groundwork and growth-centric valuation, Meta Platforms emerges as an appealing choice among big-tech investments in 2024.
Should you invest $1,000 in Palantir Technologies right now?
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Randi Zuckerberg, formerly involved in Facebook’s market development and sister to Meta Platforms CEO Mark Zuckerberg, sits on The Motley Fool’s board. Suzanne Frey, an executive at Alphabet, is also a member of The Motley Fool’s board. Manali Pradhan has no position in any mentioned stocks. The Motley Fool holds and recommends Alphabet, Meta Platforms, Nvidia, and Palantir Technologies. The Motley Fool adheres to a disclosure policy.
The thoughts expressed in this piece are solely those of the author and may not align with Nasdaq, Inc.’s views.
