Title: Consider These 2 AI Stocks Instead of Palantir: A Fresh Look
In the realm of tech stocks, one name that's been catching the eye of investors is Palantir Technologies (PLTR). With a near-quadrupling in value this year and an inclusion in the S&P 500 index, it's undeniably attracting attention. However, its sky-high valuation and considerable insider selling stir up questions about whether there are better AI-driven investment options available.
Let's explore two such alternatives that boast similar growth rates but more reasonable valuations: AppLovin and SentinelOne.
AppLovin: A Game Changer in AdTech
For those unfamiliar, AppLovin is a prominent adtech company catering to the mobile gaming industry. Apart from its own portfolio of apps, it's also a significant player in the market.
The company has been outpacing Palantir in terms of revenue growth, reporting a substantial 39% increase in its last quarter compared to Palantir's 30%. Its success can be attributed to Axon-2, an AI-powered adtech platform. This innovative solution has revolutionized the way mobile gaming app companies attract new users and monetize their games.
If we delve into the investment aspects, AppLovin has surprisingly outperformed Palantir this year, with shares appreciating around 750%. Despite this impressive performance, its valuation is still more reasonable, issuing a forward price-to-earnings (P/E) of 54 for 2025 and a price-earnings-to-growth (PEG) ratio of 1.2.
A PEG ratio below 1 is generally perceived as undervalued, but AppLovin's stock might still command multiples well above 1 – a common characteristic for growth stocks.
SentinelOne: Cybersecurity's Bright Star
Although Palantir and AppLovin have had remarkable years, other promising alternatives exist, like SentinelOne. Its shares, however, haven't exactly been charting new highs, remaining roughly at parity for the year as of now.
SentinelOne specializes in cybersecurity, offering an AI-driven platform that safeguards computer systems. Its Singularity Platform proactively protects against threats, eliminating the need for manual fixes – a feature it showcases to set itself apart from competitors like CrowdStrike.
SentinelOne demonstrated strong growth in the first half of its fiscal year, recording a 36% revenue increase. Its significant win with Lenovo, a leading PC vendor, is yet another feather in its cap. Lenovo will offer SentinelOne's endpoint security solutions on all its new PCs and also provide its existing customers the option to upgrade to SentinelOne's Singularity Platform.
With a forward price-to-sales (P/S) multiple of under 8.5 and over 30% revenue growth, SentinelOne appears well-positioned in terms of growth and valuation.
In conclusion, while Palantir's investment allure may be undeniable, AppLovin and SentinelOne exhibit compelling growth prospects and more reasonable valuations as alternatives.
Investors looking for AI-driven investment opportunities beyond Palantir Technologies might consider AppLovin, which has shown impressive revenue growth and outperformed Palantir in share appreciation this year, despite a more reasonable forward P/E and PEG ratio.
Furthermore, SentinelOne, specializing in cybersecurity, also offers an attractive investment option with its AI-driven platform and significant growth, evidenced by its 36% revenue increase in the first half of its fiscal year and its partnership with Lenovo.
