Hindsight, as they say, is 20/20. While it’s easy to analyze the past, predicting the future is far more challenging. This couldn’t be truer for Nvidia (NASDAQ:NVDA), leaving countless investors kicking themselves for not spotting the AI unicorn before it skyrocketed into the stratosphere.
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Could Palantir (NYSE:PLTR) be the next AI-inspired growth story to follow in Nvidia’s footsteps? Top investor James Foord thinks it just might be.
“Palantir’s unique technology, large addressable market, and potential for margin expansion position it similarly to NVIDIA’s pre-AI revolution phase,” writes Foord, who sits in the top 4% of all TipRanks’ stock pros.
Foord acknowledges that opinions on Palantir are divided, noting that traditional metrics could indeed suggest the big data analytics company is overvalued. However, the investor also sees significant potential, believing that PLTR stock’s triple-digit growth over the past year may be far from reaching its peak.
“With a potential target price of $100, Palantir could more than double, reflecting its unappreciated potential and substantial market opportunity,” writes Foord.
Foord describes a number of similarities between NVDA in 2020 and PLTR at present to support this bullish outlook, such as a unique technology, a mammoth potential market, and the ability to grow its margins dramatically.
“Like NVIDIA, Palantir has been waiting decades for this moment,” argues Foord, adding that PLTR’s ability to help organizations “create digital assets from real-world business models’ positions it perfectly to unleash the full power of AI.”
Assuming that PLTR captures even a small portion of the estimated $500 billion enterprise software market, according to Foord, this could still lead to $11.5 billion in annual revenues by the latter part of the decade. The investor also believes that PLTR will succeed in increasing its operating margins to 60% as revenues grow.
“Yes, this is very bullish, but it is possible,” says Foord. “Analysts can’t predict moves like this. They didn’t with NVIDIA and they won’t with Palantir.”
Reflecting this optimistic sentiment, the investor rates PLTR shares as a Buy. (To watch Foord’s track record, click here)
Palantir sparks mixed opinions on Wall Street, reflected in 4 Buy, 6 Hold, and 6 Sell ratings, all coalescing to a Hold consensus view. With a 12-month average price target of $27.67, the stock is projected to drop ~32% over the next year. (See PLTR stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
