AI Industry Projections: Two AI Stocks Projected to Surpass Palantir's Value by 2026
Unleashing the AI Revolution: Will Palantir Remain the Top Dog?
The S&P 500 is on a roll, and the driving force behind this bull run has been none other than the AI industry. With investors buzzing about the potential impact of AI on businesses, a handful of companies have reaped the benefits—none more so than Palantir Technologies (PLTR 2.53%). This tech powerhouse helps government agencies and businesses sort through their data, empowering decision-makers to make smarter choices. But with a whopping valuation of $204 billion, can it hold onto its crown? Let's take a look at two promising contenders that could potentially outshine Palantir by 2026.
1. Qualcomm: More Than Meets the Eye
Qualcomm (QCOM 1.23%) may not be the first semiconductor stock that comes to mind when thinking of artificial intelligence. However, it could play a pivotal role in the burgeoning AI sector. Qualcomm operates in two primary segments—licensing and chip manufacturing—with its patents for wireless communication technologies earning it a hefty percentage of the price for each device that uses its tech.
Qualcomm is currently grappling with Apple ditching its technology in favor of developing its own baseband chips. But don't count Qualcomm out just yet. Its chip business, QCT, could see a major boost as tech companies embed more AI processing power into devices like smartphones and PCs. With consumers eager for smarter devices, Qualcomm's QCT segment posted a 20% revenue increase and a 25% surge in earnings in the last fiscal quarter.
Qualcomm stock trades for a mere 14.3-times expected forward earnings, making it an irresistible bargain with its potential to benefit massively from growing AI adoption on devices. The stock's average trailing P/E ratio has been around 18 since 2021, pointing to around 25% upside from the current share price. A rise of that magnitude would elevate Qualcomm's market cap to over $230 billion, edging past Palantir.
2. Adobe: AI Unleashed
Adobe (ADBE -0.95%) has pumped resources into AI for years, but investors remain a bit skittish about the impact of recent advancements in generative AI on Adobe's business. Some fear new AI-powered creative tools could make Adobe's Creative Cloud applications obsolete.
However, Adobe's competitive advantages are as strong as ever. Its software remains the industry standard, and few professionals want to burden themselves with switching costs. Businesses continue to demand deliverables in Adobe's file formats, and creatives are expected to be proficient with its tools.
The real opportunity for Adobe lies in AI-powered marketing solutions. By helping businesses gather and analyze data and optimize ad spending, AI could propel ad campaigns to new heights. Adobe has been proactive, launching GenStudio for Performance Marketing and integrating Firefly Services into its broader GenStudio product. Early responses have been promising, and with Adobe stock trading at less than 22-times analysts' 2025 earnings projections, there's significant upside potential for shares that have remained relatively flat in recent years. A 25% increase in the share price would push Adobe's valuation to over $240 billion, surpassing Palantir's current worth.
As we look to the future, it's clear that AI will continue to drive growth and innovation across industries. While Palantir has undeniably made its mark, companies like Qualcomm and Adobe could be the ones to ultimately take centre stage. Keep these AI titans on your radar as they race to carve out their piece of the fast-evolving tech landscape.
- Despite being a semiconductor company, Qualcomm (QCOM 1.23%) could become a major player in the AI industry, potentially surpassing Palantir's market cap of $204 billion by 2026, given its increasing earnings and the growing AI adoption on devices.
- Adobe (ADBE -0.95%), with its $202 billion potential valuation by 2025, could also challenge Palantir's dominance in the AI sector, as it continues to reinvest in AI technology and with its business-centric AI marketing solutions.
- For those seeking investment opportunities, both Qualcomm and Adobe, with their affordable valuations, could offer significant returns and play crucial roles in the AI revolution, much like Palantir Technologies does currently.
- As we invest our money in the finance sector, it's important to keep an eye on these AI-focused companies – Palantir, Qualcomm, and Adobe – as they shape the future of various industries with their AI innovations.
