We recently compiled a list of the 10 AI Stocks Making Waves on Wall Street.In this article, we are going to take a look at where Palantir Technologies Inc. (NASDAQ:PLTR) stands against the other AI stocks.
The United States’ lead in artificial intelligence technology has become questionable after the release of DeepSeek’s AI models. As a direct consequence, the US Commerce Department is now looking into whether the Chinese company used US chips that were not allowed to be shipped to China in the first place. Last week, DeepSeek’s AI model and its free assistant, which the company claimed used less data and power than US models, wreaked havoc in the tech world and resulted in a massive broad market sell-off.
Investors began questioning the sustainability of the huge investments in AI made by leading tech giants and the significant power demand from power-hungry data centers. DeepSeek’s emergence led to worries that cost-effective AI solutions would erode market share and US tech companies' profitability. Consequently, a rout sparked that wiped around $1 trillion off U.S. technology stocks.
DeepSeek has claimed that its chatbot performs on par or better than Microsoft-backed OpenAI at a fraction of the cost. However, a report published by NewsGuard has revealed that the chatbot achieved only 17% accuracy in delivering news and information. It further revealed that it repeated false claims 30% of the time and gave vague or useless answers 53% of the time in response to news-related prompts, raising doubts about the claims it initially made.
While clarity on these models is yet to be achieved, the current restrictions on companies such as Nvidia have been in place to stop the most sophisticated chips from reaching China and restrict the country from taking the lead in AI. According to a source reported by Reuters, however, organized AI chip smuggling to China has been tracked out of a few countries, including Malaysia, Singapore, and the United Arab Emirates.
In this regard, Singapore's trade ministry noted that there is no reason to believe that DeepSeek obtained any export-controlled products from the country. It further noted that it has always upheld the rule of law and acted decisively against those who disobey the rules.
"We expect U.S. companies to comply with U.S. export controls and our domestic legislation. Our customs and law enforcement agencies will continue to work closely with their U.S. counterparts."
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
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Palantir Technologies Inc. (PLTR) Positioned Well in the AI Market but Faces Growth Challenges
A software engineer manipulating a vast network of code on virtual monitors.
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems. On February 3rd, the company announced financial results for the fourth quarter and fiscal year ended December 31, 2024. Palantir has had a strong quarter. The company posted adjusted earnings per share (EPS) of 14 cents, surpassing the consensus estimate of 11 cents according to data compiled by LSEG. Revenue also came in higher than expected, reaching $828 million compared to analysts' projections of $776 million. Showcasing strong momentum, Palantir closed 129 deals of at least $1 million, 58 deals of at least $5 million, and 32 deals of at least $10 million. Besides the fourth-quarter beat, the company also provided better-than-expected guidance. It expects revenue of between $858 million and $862 million, ahead of an LSEG estimate of $799 million. For the full year, the company forecast sales of $3.74 billion to $3.76 billion, exceeding the $3.52 billion average estimate. Palantir's Chief Revenue Officer Ryan Taylor told Reuters that the revenue is being driven by both new customers and the expansion of those customers with Palantir’s Artificial Intelligence Platform AIP. According to CEO Alexander Karp, there is an “untamed organic growth” in demand for its artificial intelligence software.
“Our business results continue to astound, demonstrating our deepening position at the center of the AI revolution. Our early insights surrounding the commoditization of large language models have evolved from theory to fact. I would also like to congratulate Palantirians for their extraordinary contributions to our growth. They have earned every bit of the compensation from the delivery of their market-vesting stock appreciation rights (SARs).”
Responding to queries regarding DeepSeek, Reuters reported that Karp has discouraged its clients from using DeepSeek, stating that U.S. government customers would be unable to use the Chinese company's models.
Overall PLTR ranks 6th on our list of the AI stocks that are making waves on Wall Street. While we acknowledge the potential of PLTR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
