Comparing AI Stocks: Meta Platforms, Palantir, and Emerging Players

Better AI Stock: Meta Platforms or Palantir

If there is one major trend that's revolutionizing the world today, it's artificial intelligence (AI). With its ability to analyze vast amounts of data and help its users make intelligent decisions, AI is disrupting almost every industry, from finance to education, healthcare, energy, and more. This revolution will lead to winners and losers as the former openly embrace these new technologies while the latter shun them. Palantir (NYSE: PLTR) and Meta Platforms (NASDAQ: META). are both well-positioned to be among the winners, but which would be a better bet for your portfolio now? Founded in 2003, Palantir's original core business was helping the U.S. government analyze mountains of complex and unstructured data it possessed across a host of databases. With the help of Palantir's early AI software, intelligence agencies gained insights that helped them make critical decisions in their counter-terrorism operations. That initial success helped the company expand its clientele to other government agencies domestically and abroad. In recent years, the tech company has leveraged the experience it gained in the public sector to help private corporations with complex tasks like fraud detection, risk management, etc. All these problems require robust software platforms that can consume vast amounts of internal and external data, analyze it, and provide useful insights to clients. Palantir's software platforms -- Gotham for government agencies, Foundry for private-sector clients -- can handle vast amounts of data. For example, clients can leverage their existing data infrastructures when implementing Palantir's Artificial Intelligence Platform (AIP) solutions such as machine learning, generative AI, etc. Potential clients can also leverage Palantir's AIP "boot camps" to experiment with its software. These events allow organizations to rapidly see how the company's services could be applied directly to addressing one of their specific needs. Giving potential clients the chance to experience how its AI can help them in their existing operations puts Palantir ahead of most of its competitors, especially those still in earlier stages of developing their software solutions. Palantir's early-mover advantage positions it well to capture a share of the vast and growing AI market. According to forecasts from Statista, the AI market is set to reach $184 billion in 2024 and could grow to $827 billion in 2030. Palantir's revenue was $2.2 billion in 2023, so its prospects for benefiting from that market growth look bright. Meta Platforms Like Palantir, Meta Platforms has the potential to be a massive beneficiary of the AI boom, though its opportunities are vastly different. Meta is predominantly a social media networking and metaverse company, so it's employing AI technologies to improve its product offerings for both users and advertisers. For example, Meta is integrating AI across its apps, including Facebook, Instagram, WhatsApp, and Messenger, to enhance its personalized content feeds and recommendation systems. Better content recommendation systems help increase user engagement and promote user loyalty. Another example is to use AI to automatically translate content languages, giving users easier access to foreign content. Similarly, Meta employs AI to help advertisers get better returns on their marketing spending. For example, AI can help advertisers analyze massive amounts of data, gain insights on trends, and offer recommendations on strategy. While Meta doesn't charge its advertisers for the use of these AI tools, it benefits indirectly from advertisers' success -- since advertisers whose Meta campaigns are successful will be more likely to spend more on its platforms. This is another significant difference from Palantir since Palantir generates revenue directly from clients using its AI platforms, while at Meta, AI's contributions are indirect. As such, it will be difficult for investors to ascertain how AI is impacting Meta's overall financial performance. On the positive end, Meta is a well-established tech giant with solid earnings and a strong balance sheet, making it a potentially less risky investment than the smaller Palantir. A quick word on valuation Neither of these companies appears to be cheap, especially when measured using traditional metrics like the price-to-sales (P/S) and price-to-earnings (P/E) ratios. Palantir has a P/S multiple of 29 and a P/E of 243, while Meta's P/S multiple is 9 and its P/E is 29. Comparatively, Palantir's valuations are significantly higher than Meta's, indicating that investors have higher growth expectations for the former. This makes sense since Palantir has a market capitalization of $64 billion and revenue of $2.2 billion, while Meta is a $1.28 trillion giant with a top line of $134.9 billion. The smaller company would appear to have far more runway for long-term expansion. Still, it's worth reiterating that these companies have very different business models, so one can't make an apples-to-apples comparison. Which is the better AI stock to buy now? The quick answer is that there's no obvious winner. Meta Platforms is an established and wildly profitable tech giant that's actively embracing AI technologies to strengthen its business, but it does not directly make money from those AI tools. On the other hand, Palantir provides investors with direct exposure to AI since it makes money from its AI software and tools. Yet the stock is much more expensive. Investors should, therefore, focus on the company they are more comfortable with -- and usually, that means the one whose business model is within their circle of competence. Should you invest $1,000 in Palantir Technologies right now? Before you buy stock in Palantir Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Palantir Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $741,989!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms and Palantir Technologies. 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.

2 Up-and-Coming AI Stocks to Keep on Your Radar

If asked to name a few artificial intelligence (AI) companies, most investors will likely suggest such big tech companies as Amazon, Alphabet, and Microsoft. While there's nothing wrong with these companies -- they are leaders in this AI revolution -- there are other smaller but equally well-positioned companies that could become future giants. This article aims to share two lesser-known companies that have long positioned their business to benefit from the transition to AI. Palantir (NYSE: PLTR) may not be a household name like Amazon or Google, but that doesn't mean the company is an insignificant player in the tech industry. Conversely, it's a critical player in the enterprise software sector, serving major corporations in both the public and private sectors -- governments, major banks, oil companies, etc. Palantir aims to help its clients gain insights and clarity through data, as its namesake suggests. It began by supporting the U.S. Department of Defense in counterterrorism activities by providing it with insights gained from its software platform, Gotham. The company later expanded into other public agencies locally and overseas and, in recent years, accelerated its investment in the private sector. With more than two decades of experience providing software tools to analyze large and complex data sets, Palantir is favorably positioned to leverage its know-how to offer AI solutions to existing and new customers. For example, existing clients can easily leverage their past investment in data infrastructure to run Palantir's latest AI software tools, such as machine learning, generative AI, etc. Besides, Palantir's solid reputation -- gained over the years from serving massive corporations globally -- gives it a huge advantage in recruiting new clients. For example, a chief technology officer will find it easier to convince the CEO and the board to implement Palantir's software solutions than other AI start-ups' solutions. Palantir's solid financial performance over the last few years reflects its strong market position. In the previous five years, revenue has tripled from $595 million in 2018 to $2.2 billion in 2023, a compound annual growth rate (CAGR) of 30%. The bottom line also improved from a negative $580 million to a positive $210 million in that period. Palantir demonstrates a rare combination of high growth and profitability. The one big downside to the stock is its sky-high valuation -- its price-to-earnings (P/E) ratio is 239 as of this writing. Thus, except for a few risk-takers, conservative investors should keep the stock on their radar for now. C3.ai C3.ai (NYSE: AI) is an enterprise AI software company that went public in 2020. While it might be a young public company, it has been operating in the market for nearly 15 years. Established in 2009 by Thomas Siebel -- the same person who founded and sold CRM company Seibel Systems to Oracle -- C3.ai provides AI solutions under the software-as-a-service (SaaS) business model. The company mainly provides services under C3 AI Suite and C3 AI Applications. C3 AI Suite is an AI platform that helps clients design, build, and deploy AI applications in their business. Using this platform, clients can build tailored applications that help them meet their daily operational needs. On the other hand, C3 AI Applications are ready-made applications that clients can install and use immediately. Usually, these apps have been developed earlier for another company within the same industry. Like Palantir, C3.ai provides AI-related software solutions to help big corporations leverage AI technologies to improve their operations. And since C3.ai has been heavily investing in the AI industry, it has, over the years, secured major contracts from such clients the U.S. Air Force, Shell, and AstraZeneca, to mention a few. Again, like Palantir, C3.ai's early-mover advantage translates into robust growth. In the last five years, revenue more than tripled from $92 million in the fiscal year ending April 30, 2019, to $311 million in the fiscal year ending April 30, 2024. However, unlike its larger peers, C3.ai remains in the red as it continues its heavy investments in research and development and sales and marketing. Investors should also note that while C3.ai stock's valuation is not as expensive as Palantir's, it is not cheap. As of this writing, it trades at a price-to-sales (P/S) ratio of 11.5, while Palantir's P/S ratio stands at 28.7. However, compared to well-established tech giants like Alphabet, with a P/S ratio of 7.7, the young company's stock appears pricey. In short, while C3.ai's prospects look promising, investors should note that the company remains unprofitable and the stock is not in bargain territory. Thus, it's probably best that investors track the stock for some time before making their next move. Should you invest $1,000 in Palantir Technologies right now? Before you buy stock in Palantir Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Palantir Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $722,626!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, Oracle, and Palantir Technologies. The Motley Fool recommends AstraZeneca Plc and C3.ai and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. 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.

Better AI Stock: Meta Platforms or Palantir | The Motley Fool

Both companies are exposed to the AI boom, but in quite different ways. If there is one major trend that's revolutionizing the world today, it's artificial intelligence (AI). With its ability to analyze vast amounts of data and help its users make intelligent decisions, AI is disrupting almost every industry, from finance to education, healthcare, energy, and more. This revolution will lead to winners and losers as the former openly embrace these new technologies while the latter shun them. Palantir (PLTR -0.21%) and Meta Platforms (META 0.20%). are both well-positioned to be among the winners, but which would be a better bet for your portfolio now? Founded in 2003, Palantir's original core business was helping the U.S. government analyze mountains of complex and unstructured data it possessed across a host of databases. With the help of Palantir's early AI software, intelligence agencies gained insights that helped them make critical decisions in their counter-terrorism operations. That initial success helped the company expand its clientele to other government agencies domestically and abroad. In recent years, the tech company has leveraged the experience it gained in the public sector to help private corporations with complex tasks like fraud detection, risk management, etc. All these problems require robust software platforms that can consume vast amounts of internal and external data, analyze it, and provide useful insights to clients. Palantir's software platforms -- Gotham for government agencies, Foundry for private-sector clients -- can handle vast amounts of data. For example, clients can leverage their existing data infrastructures when implementing Palantir's Artificial Intelligence Platform (AIP) solutions such as machine learning, generative AI, etc. Potential clients can also leverage Palantir's AIP "boot camps" to experiment with its software. These events allow organizations to rapidly see how the company's services could be applied directly to addressing one of their specific needs. Giving potential clients the chance to experience how its AI can help them in their existing operations puts Palantir ahead of most of its competitors, especially those still in earlier stages of developing their software solutions. Palantir's early-mover advantage positions it well to capture a share of the vast and growing AI market. According to forecasts from Statista, the AI market is set to reach $184 billion in 2024 and could grow to $827 billion in 2030. Palantir's revenue was $2.2 billion in 2023, so its prospects for benefiting from that market growth look bright. Like Palantir, Meta Platforms has the potential to be a massive beneficiary of the AI boom, though its opportunities are vastly different. Meta is predominantly a social media networking and metaverse company, so it's employing AI technologies to improve its product offerings for both users and advertisers. For example, Meta is integrating AI across its apps, including Facebook, Instagram, WhatsApp, and Messenger, to enhance its personalized content feeds and recommendation systems. Better content recommendation systems help increase user engagement and promote user loyalty. Another example is to use AI to automatically translate content languages, giving users easier access to foreign content. Similarly, Meta employs AI to help advertisers get better returns on their marketing spending. For example, AI can help advertisers analyze massive amounts of data, gain insights on trends, and offer recommendations on strategy. While Meta doesn't charge its advertisers for the use of these AI tools, it benefits indirectly from advertisers' success -- since advertisers whose Meta campaigns are successful will be more likely to spend more on its platforms. This is another significant difference from Palantir since Palantir generates revenue directly from clients using its AI platforms, while at Meta, AI's contributions are indirect. As such, it will be difficult for investors to ascertain how AI is impacting Meta's overall financial performance. On the positive end, Meta is a well-established tech giant with solid earnings and a strong balance sheet, making it a potentially less risky investment than the smaller Palantir. Neither of these companies appears to be cheap, especially when measured using traditional metrics like the price-to-sales (P/S) and price-to-earnings (P/E) ratios. Palantir has a P/S multiple of 29 and a P/E of 243, while Meta's P/S multiple is 9 and its P/E is 29. Comparatively, Palantir's valuations are significantly higher than Meta's, indicating that investors have higher growth expectations for the former. This makes sense since Palantir has a market capitalization of $64 billion and revenue of $2.2 billion, while Meta is a $1.28 trillion giant with a top line of $134.9 billion. The smaller company would appear to have far more runway for long-term expansion. Still, it's worth reiterating that these companies have very different business models, so one can't make an apples-to-apples comparison. The quick answer is that there's no obvious winner. Meta Platforms is an established and wildly profitable tech giant that's actively embracing AI technologies to strengthen its business, but it does not directly make money from those AI tools. On the other hand, Palantir provides investors with direct exposure to AI since it makes money from its AI software and tools. Yet the stock is much more expensive. Investors should, therefore, focus on the company they are more comfortable with -- and usually, that means the one whose business model is within their circle of competence.

2 Up-and-Coming AI Stocks to Keep on Your Radar | The Motley Fool

These two tech companies could become the giants of the future. If asked to name a few artificial intelligence (AI) companies, most investors will likely suggest such big tech companies as Amazon, Alphabet, and Microsoft. While there's nothing wrong with these companies -- they are leaders in this AI revolution -- there are other smaller but equally well-positioned companies that could become future giants. This article aims to share two lesser-known companies that have long positioned their business to benefit from the transition to AI. Palantir (PLTR -0.21%) may not be a household name like Amazon or Google, but that doesn't mean the company is an insignificant player in the tech industry. Conversely, it's a critical player in the enterprise software sector, serving major corporations in both the public and private sectors -- governments, major banks, oil companies, etc. Palantir aims to help its clients gain insights and clarity through data, as its namesake suggests. It began by supporting the U.S. Department of Defense in counterterrorism activities by providing it with insights gained from its software platform, Gotham. The company later expanded into other public agencies locally and overseas and, in recent years, accelerated its investment in the private sector. With more than two decades of experience providing software tools to analyze large and complex data sets, Palantir is favorably positioned to leverage its know-how to offer AI solutions to existing and new customers. For example, existing clients can easily leverage their past investment in data infrastructure to run Palantir's latest AI software tools, such as machine learning, generative AI, etc. Besides, Palantir's solid reputation -- gained over the years from serving massive corporations globally -- gives it a huge advantage in recruiting new clients. For example, a chief technology officer will find it easier to convince the CEO and the board to implement Palantir's software solutions than other AI start-ups' solutions. Palantir's solid financial performance over the last few years reflects its strong market position. In the previous five years, revenue has tripled from $595 million in 2018 to $2.2 billion in 2023, a compound annual growth rate (CAGR) of 30%. The bottom line also improved from a negative $580 million to a positive $210 million in that period. Palantir demonstrates a rare combination of high growth and profitability. The one big downside to the stock is its sky-high valuation -- its price-to-earnings (P/E) ratio is 239 as of this writing. Thus, except for a few risk-takers, conservative investors should keep the stock on their radar for now. C3.ai (AI -1.45%) is an enterprise AI software company that went public in 2020. While it might be a young public company, it has been operating in the market for nearly 15 years. Established in 2009 by Thomas Siebel -- the same person who founded and sold CRM company Seibel Systems to Oracle -- C3.ai provides AI solutions under the software-as-a-service (SaaS) business model. The company mainly provides services under C3 AI Suite and C3 AI Applications. C3 AI Suite is an AI platform that helps clients design, build, and deploy AI applications in their business. Using this platform, clients can build tailored applications that help them meet their daily operational needs. On the other hand, C3 AI Applications are ready-made applications that clients can install and use immediately. Usually, these apps have been developed earlier for another company within the same industry. Like Palantir, C3.ai provides AI-related software solutions to help big corporations leverage AI technologies to improve their operations. And since C3.ai has been heavily investing in the AI industry, it has, over the years, secured major contracts from such clients the U.S. Air Force, Shell, and AstraZeneca, to mention a few. Again, like Palantir, C3.ai's early-mover advantage translates into robust growth. In the last five years, revenue more than tripled from $92 million in the fiscal year ending April 30, 2019, to $311 million in the fiscal year ending April 30, 2024. However, unlike its larger peers, C3.ai remains in the red as it continues its heavy investments in research and development and sales and marketing. Investors should also note that while C3.ai stock's valuation is not as expensive as Palantir's, it is not cheap. As of this writing, it trades at a price-to-sales (P/S) ratio of 11.5, while Palantir's P/S ratio stands at 28.7. However, compared to well-established tech giants like Alphabet, with a P/S ratio of 7.7, the young company's stock appears pricey. In short, while C3.ai's prospects look promising, investors should note that the company remains unprofitable and the stock is not in bargain territory. Thus, it's probably best that investors track the stock for some time before making their next move.