Once-in-a-generation investment opportunity: 1 artificial intelligence (AI) growth stock you can buy now and hold forever

It’s been about a year since the latest developments in generative artificial intelligence (AI) burst onto the scene and captivated Main Street and Wall Street alike. These next-generation algorithms can do much more than their predecessors, by creating original documents, summarizing data, writing and modifying computer code, and even creating original presentations from existing data. Dramatically improve your productivity.

microsoft Co-founder and former CEO Bill Gates knows a thing or two about technology, and his views on AI are impressive. “AI is going to completely change the way we use computers and transform the software industry,” Gates recently said. He goes on to say that over the next five years, generative AI “agents” will handle many everyday tasks and do things that would have been unfathomable just a few years ago.

Conservative estimates put the economic value of the generative AI market at more than $1 trillion, with some being many times that amount. This could be a windfall for companies and shareholders who stand to benefit from this trend. He works at a company that has been at the forefront of AI research for many years, and one thing is Palantir Technologies (PLTR 3.74%). As the godfather of AI, the company represents an attractive addition to any AI portfolio.

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I’ve been toiling behind the scenes for decades.

Palantir Technologies is an entrepreneur; PayPal Co-founder Peter Thiel. In the wake of the 9/11 terrorist attacks, Thiel envisioned an algorithm that could sift through the vast amounts of data collected by U.S. intelligence and law enforcement agencies and identify patterns that could detect terrorist activity before it strikes. In fact, one of Palantir’s first investors was In-Q-Tel, the venture capital arm of the Central Intelligence Agency.

It didn’t take long for Palantir’s AI system to gain deep support within the intelligence community and expand to many other U.S. government agencies, including the Federal Bureau of Investigation, the National Security Agency, and the Department of Defense, among others.

But the biggest opportunity comes not from governments, but from the realization that these algorithms can be effectively used for data mining and business analysis services for enterprises.

Vast and growing opportunity

What differentiates generative AI from earlier AI is the productivity improvements mentioned above. Time is money, the old saying goes, and businesses of all sizes want to share in the resulting benefits.

Despite many estimates, no one knows how big the AI ​​opportunity will ultimately become. According to Bloomberg Intelligence, AI generation could become a $1.3 trillion market by 2032. Cathie Wood’s Ark Investment Management takes a far more bullish view, estimating that AI software alone could add $13 trillion to spending by the end of 2020. The market is still in its infancy, so no one knows for sure. What is clear is that an opportunity this big cannot be ignored.

paint by numbers

Palantir’s recent results paint a compelling picture. His Palantir revenue for the fourth quarter was $608 million, up 20% year-over-year and 9% sequentially. The boost was driven by a 70% increase in U.S. commercial revenue as demand for the company’s generative AI-powered artificial intelligence platform (AIP) soared. As a result, Palantir achieved five consecutive quarters of profitability under generally accepted accounting principles, with adjusted EPS of $0.08. Management continued to predict that the U.S. commercial sector would grow at least 40% over the next 12 months.

By way of background, analyst consensus estimates had soared ahead of Palantir’s financial announcement, calling for revenue of $602.4 million and EPS of $0.08, so it was a strong performance by all measures.

In a letter to Palantir shareholders, management said projects that previously took “weeks, or even months, if not more,” can now be “up and running in just hours.” Ta. To meet demand, the company has held more than 500 “boot camps” for customers since his AIP debut. “With these immersive, hands-on keyboard sessions, participants can expect to go from zero to use case in just 1-5 days,” the company writes.

Palantir also noted that demand is “unlike anything seen over the past 20 years.”

attractive opportunity

As such, Palantir stock has been on the rise over the past year or so, rising more than 250% since the beginning of 2023. Despite its meteoric rise, the stock remains significantly undervalued, trading at a price-to-earnings ratio of about 1. Criteria for undervalued stocks.

Combine this price with strong demand for its products and increasing sales and profits, and you can see why Palantir Technologies is well-positioned to benefit from this once-in-a-generation opportunity.