Palantir Technologies has witnessed a staggering rise in its stock value, gaining more than 2,000% since the AI revolution began roughly three years ago. Following the release of OpenAI’s ChatGPT at the end of November 2022, Palantir’s market capitalization stood at $12.5 billion. Presently, the data-mining company boasts a valuation exceeding $400 billion, surpassing the combined worth of software giants Salesforce and Adobe.
This remarkable ascent positions Palantir as a significant benefactor of the artificial intelligence (AI) boom; however, the impact of AI extends beyond enterprise software. The hardware sector, particularly semiconductor stocks, represents a lucrative segment of this technological evolution. While Nvidia, Broadcom, and Taiwan Semiconductor Manufacturing dominate the AI chip market, Advanced Micro Devices (AMD) should not be overlooked.
Looking ahead, a closer examination of both Palantir and AMD reveals potential future trajectories, with speculation that AMD may eclipse Palantir’s valuation by 2026. Since the onset of the AI revolution, Palantir’s stock has experienced volatile but predominantly upward trends, making it difficult for investors to incur losses. The company’s software offerings—including platforms like Foundry, Gotham, and Apollo—have garnered substantial demand as enterprises and government entities strive to enhance data-driven processes.
Despite significant revenue and profit growth, Palantir’s hefty price-to-sales (P/S) ratio of 112 raises questions about its sustainability. This valuation is considerably higher than that of many comparable high-growth software firms. Historical parallels can be drawn with the dot-com bubble of the late 1990s, which serves as a cautionary tale; numerous internet companies failed to maintain inflated valuations over time.
As expectations for Palantir continue to escalate, the challenge will be meeting these demands without a slowdown in AI-driven growth. Any inability to deliver on investor expectations could lead to a substantial de-rating of its stock as the market reassesses its valuation, potentially indicating a correction in what some may view as an overbought status.
In contrast, AMD’s stock is showing robust momentum, having increased by 79% this year. Traditionally seen as a second-tier player in the AI chip market, AMD is beginning to carve out a significant niche. Its MI300 and MI400 chip series have attracted major clients, including Microsoft and Meta Platforms, who are supplementing their existing Nvidia setups with AMD chips. A recent deal with Oracle to provide 50,000 MI450 chips further underscores AMD’s growing influence.
Goldman Sachs projects that hyperscalers will allocate approximately $500 billion for capital expenditures next year, a trend that bodes well for AMD as it positions itself to capture an increasing share of the AI infrastructure market. The company’s ability to thrive amid competitive pressures from Nvidia suggests a potential for continued stock price appreciation.
For AMD to equal Palantir’s current market cap, its stock would need to rise by about 16%, assuming Palantir’s valuation remains static. The competitive landscape highlights both companies’ strengths, but AMD appears to have a more direct path to capitalize on the expanding AI infrastructure, potentially leading to a prolonged breakout.
Investors are acutely aware that stock valuations rarely increase indefinitely. While precise predictions remain elusive, AMD’s current trajectory indicates a likelihood of significant gains aligned with the AI infrastructure boom—possibly positioning it to exceed a market value of $400 billion by 2026, surpassing Palantir.
See also
AI and Cash Revolutionize European Banking: Insights from Diebold Nixdorf’s Helena Müller
UnitedHealthcare Launches AI-Driven Advocate Assist to Enhance Patient Support and Care
Cera’s AI Predictive Tech Set to Save NHS £200M This Winter, Says CEO Dr Ben Maruthappu
