Superior AI Investment Pick: Strategy Instead of Palantir (Revised)
Going AI or Bitcoin? Let's weigh Palantir Technologies (PLTR) against MicroStrategy (MSTR) in the AI race. While MSTR was known for its Bitcoin hoarding, it's diversifying into AI, and Palantir is already established in this field.
Bitcoin, a Cash Cow or a Diversion? Until last year, MSTR was more recognized as a Bitcoin investor than a software company. It currently owns a whopping 499,226 Bitcoins, worth approximately $41.7 billion, accounting for over half of its $77.5 billion market cap. But its AI tools for its business intelligence (BI) platform and plans to cloud-based services are steps in the right direction. Investors should note that MSTR is committed to spending most of its cash on more Bitcoin, potentially overshadowing its software business.
Palantir – Steady Growth, Overheated Valuations Palantir went public in 2020 and has seen impressive growth, with a revenue CAGR of 27% from 2020 to 2024. However, its stock valuation is soaring—already trading at 282x forward earnings and 53x next year's sales. In a choppy market, such nosebleed valuations might limit its upside potential or set it up for steep drops in the event of a broader downturn.
Palantir’s Advantage Unlike MSTR, Palantir has advanced AI capabilities integrated across various industries, including aerospace, defense, and industrial IoT. With strategic partnerships and a diversified client base, Palantir is more stable and better positioned for growth, offering a brighter future as an AI investment.
Palantir's AI Tools Palantir's platforms like Foundry and Apollo help clients make smarter decisions by mining, aggregating, and analyzing data. One standout example is its Workflow Builder, which empowers clients to create their AI-powered apps, actions, and agents across its ecosystem, capitalizing on the growth of the AI market.
The Verdict Both stocks are volatile, so cautious buying is advised. In terms of AI potential, Palantir is the clear winner. Its extensive AI capabilities, diversified applications, and diverse client base set it apart from MSTR, making it a more robust AI investment. However, Palantir's overheated valuations demand careful consideration for potential investors.
AI's future seems to be leaning towards Palantir, with its advanced capabilities across multiple industries, such as aerospace, defense, and industrial IoT. This diversified client base and strategic partnerships position Palantir well for growth, a trait not found in MicroStrategy currently focused on Bitcoin investing and expanding into AI. While MicroStrategy's AI tools for its business intelligence platform and cloud-based services show a shift, they remain secondary to its massive Bitcoin holdings, which take up most of its cash for investment. This focus on cryptocurrency might hinder MicroStrategy's growth in the AI sector compared to Palantir's Ready AI platforms like Foundry and Apollo, designed to enable smarter decision-making through data analysis and AI integration. Therefore, while Palantir's soaring valuations require careful thought, it seems to have a more promising future in the realm of AI finance and investing.
