Forget Palantir: Top 2 AI Stocks to Invest in Right Now for Maximum Profit Potential
Should You Forget Palantir and Buy These 2 Artificial Intelligence (AI) Stocks Instead?
Source: The Motley Fool
Overview of Investment Potential
Investors are looking for alternatives to Palantir, given its significantly inflated valuations. Two stocks are presented as compelling alternatives: AppLovin and SentinelOne.
Why Palantir's Valuation Raises Concerns
- Palantir's current valuation is notably high, with a forward price-to-sales (P/S) ratio of 45.7 and a forward price-to-earnings (P/E) ratio of 147.
- Insider selling trends indicate a potential lack of confidence among top executives.
AppLovin: Strong Growth and Attractive Valuation
AppLovin, known for its advertising technology in mobile gaming, stands out for its rapid expansion and favorable pricing.
Key Highlights:
- Revenue growth of 39%, outpacing Palantir’s 30% growth.
- Forward P/E of 54 and a price/earnings-to-growth (PEG) ratio of 1.2, indicating a more reasonable valuation.
- Plans to expand services beyond gaming into e-commerce, anticipating revenue growth of 20-30% annually.
SentinelOne: Cybersecurity with Strong Growth Prospects
SentinelOne is a cybersecurity firm utilizing AI to enhance threat detection and response.
Key Highlights:
- Financially stable with revenue growth of 36% year-over-year.
- Recent significant contract with Lenovo to enhance endpoint security, expected to boost revenue in 2025.
- Currently trading at a P/S ratio of less than 8.5, presenting good value compared to its growth potential.
Final Thoughts
With their attractive valuations and growth rates exceeding those of Palantir, both AppLovin and SentinelOne represent enticing investment opportunities in the AI space, overshadowing Palantir's inflated metrics.
