Stocks in artificial intelligence (AI) are soaring as more and more sectors embrace AI’s revolutionary technologies, such as machine learning and natural language processing, which were once considered futuristic.
In 2023, growth-oriented investors may find attractive possibilities in AI equities, but they need also be cautious due to the sector’s hyper-innovation and inherent unpredictability.
Two attractive artificial intelligence (AI) equities for investors to consider this week are Palantir Technologies Inc. (PLTR) and Snowflake Inc. (SNOW).
Blazing the Trail for Data-Driven Transformation
From healthcare to banking, the AI industry is influencing a wide variety of fields with its focus on developing smart machines that can mimic human intelligence.
Innovations such as decision-making algorithms, predictive analytics, and speech recognition are all part of artificial intelligence.
Artificial intelligence investment has skyrocketed as AI capabilities have become more sophisticated and widely used. More than thirteen billion dollars was raised by AI startups worldwide in 2022.
| Category | Snowflake (SNOW) | Palantir (PLTR) |
|---|---|---|
| Business | Provides a cloud-based data platform to manage and analyze data | Provides data analytics software to generate actionable intelligence |
| Key Products | Snowflake Data Cloud, Snowflake Data Marketplace | Foundry, Gotham, Apollo |
| Key Customers | Adobe, Amway, Blackstone, Capital One, GoDaddy, etc. | CIA, FBI, NHS, U.S. Army, Airbus, PG&E, etc. |
| Market Cap | $49.6 billion | $29.3 billion |
| Revenue (Q3 2022) | $557 million | $477 million |
| Revenue Growth (YOY) | 67% | 22% |
| Net Income | -$100 million (loss) | $61 million (profit) |
| Year Founded | 2012 | 2003 |
| Founders | Benoit Dageville, Thierry Cruanes, Marcin Zukowski | Peter Thiel, Alexander Karp, Joe Lonsdale, Stephen Cohen |
| Headquarters | Bozeman, Montana | Denver, Colorado |
Snowflake: The Data Cloud Platform of the Future
With the help of artificial intelligence and machine learning, Snowflake Inc. (SNOW) offers businesses a safe, adaptable, and quick cloud platform for their data.
With the Snowflake platform, users can seamlessly share controlled data between regions and other cloud data platforms, execute various analytic workloads, and combine siloed data.
With a 67% increase in revenue and a 71% increase in product sales year-over-year, Snowflake saw phenomenal growth in Q3 2023. More than 2,461 Fortune 500 companies are among Snowflake’s 6,800 paying customers.
Crucially, the number of clients that produce more than $1 million in product revenue has increased by 117% in the past year, indicating that the company’s largest customers are expanding at a rapid pace.
“The data-driven revolution continues to drive exceptional demand for the Data Cloud and Snowflake,” remarked Frank Slootman, CEO of Snowflake, reflecting on another outstanding quarter.
Snowflake gives businesses the tools they need to harness data on a massive scale, which is becoming increasingly important in the digital economy.
With a market worth close to $50 billion, SNOW stock gives investors a chance to own a piece of a tech company that is leading a very promising industry.
Palantir: Transforming Data into Strategic Advantage
Government agencies and global enterprises utilize Palantir Technologies Inc.’s (PLTR) data analytics software to gain strategic advantage from vast data streams.
Palantir’s solutions enable sophisticated analytics and artificial intelligence by integrating disparate data sources into a unified database.
Palantir has extended its provision of the Army Vantage platform with a $115 million contract expansion, as announced last week, with the U.S. Army. Palantir has been a key partner in the Army’s efforts to improve decision-making across the board since their inaugural partnership in 2021.
In addition, Palantir and SmartWatt have just released Orpheus, an energy management platform that uses artificial intelligence and sophisticated analytics to assist businesses in monitoring, controlling, and optimizing their energy consumption.
Revenue growth from Palantir’s government and commercial partners was evident in Q3 figures. A 22% year-over-year gain brought the company’s Q3 revenue forecast up to $477 million. Compared to Q3 2021, U.S. government revenue increased by 66%.
With a market cap of around $30 billion, PLTR provides investors with exposure to Palantir’s critical role in supplying the data infrastructure that drives artificial intelligence applications in sectors ranging from healthcare to aerospace.
Palantir is enhancing its capacity to handle the data tsunami of the modern day with new platforms such as Orpheus.
The Risks and Rewards of AI Stocks
Investors seeking exponential growth are drawn to AI due to its revolutionary potential in a world where software and data are driving economic progress.
Advancements in driverless vehicles, tailored healthcare, automated customer service, predictive supply chain analytics, and countless more fields are made possible by AI.
The rapid evolution of AI, however, can bring forth both spectacular ascents and precipitous declines. If expected improvements don’t make a difference or yield substantial revenues, investor mood can change fast. Hot momentum plays, in the stock market, might suddenly become chilly.
Profitability is a big question mark for smaller AI startups since they often go bankrupt funding R&D without clear monetization strategies.
Tech giants are spending billions on artificial intelligence (AI) research and development and mergers and acquisitions, which is heating up the market. Constant innovation is necessary to achieve long-term distinction.
Investing in AI requires a deep dive into valuations, competitive dynamics, addressable markets, and the effectiveness of problem-solving, but the long-term rewards seem great. The rate of advancement in AI needs to be matched by the speed of due diligence.
Snowflake and Palantir: Two AI Leaders to Evaluate in 2023
This week, Palantir Technologies Inc. (PLTR) and Snowflake Inc. (SNOW) present attractive opportunities for investors looking to gain exposure to top-tier AI technologies. At the profitable crossroads of artificial intelligence and enterprise data platforms, both businesses sit.
Customers are able to perform complex analytics, including those involving machine learning algorithms, thanks to Snowflake’s innovative data cloud architecture, which unites siloed data sources.
Artificial intelligence (AI) testing is made easier on this platform thanks to its adaptability, user-friendliness, and processing power.
Investing in SNOW stock provides a pure-play opportunity to capitalize on the increasing demand for scalable data analytics among enterprises. Snowflake is fueling data-driven change at industry heavyweights such as Adobe, Capital One, and GoDaddy.
Meanwhile, Palantir assists top institutions in turning massive datasets into strategic assets by leveraging AI capabilities.
Applications of artificial intelligence made possible by Palantir have improved disaster preparedness, increased production quality, revealed networks involved in human trafficking, and many more.
Our Palantir partners are always on the lookout for new data pools to mine for useful insights, whether they’re in the public or private sector.
The combination of Palantir’s public and private sector partners has yielded both immediate and long-term benefits, as the stock price of the company has increased by more than 180% year-to-date on the back of three consecutive quarters of increased revenue.
Final Verdict: Strong Innovation Tailwinds, But Expect Volatility
The AI industry is showing signs of life, thanks to multiple billion-dollar investment rounds and growing numbers of practical applications. Unlocking new possibilities, AI enables self-driving capabilities, algorithms for disease diagnostics, and smart cities operating on efficient energy grids.
However, missteps and disappointments abound in a highly competitive and ever-changing field. Startups and tech heavyweights alike are still honing their AI business strategies.
Investors in Silicon Valley-style growth companies with a data-centric future can find what they’re looking for in Snowflake Inc. (SNOW) and Palantir Technologies Inc. (PLTR), two market leaders in their respective industries.
Even while the direction is up over a long enough timeline, the journey will be tumultuous owing to volatile investor mood and the historically low valuations of the industry.
Artificial intelligence (AI) is one area where the future is both now and forever unfinished. That dichotomy offers both opportunities for AI stock price appreciation and threats that can debunk the predictions of the most astute market watchers.