Palantir, Salesforce lead charge in monetizing AI in 2025: Wedbush
Dec. 26, 2024 11:10 AM ET
By: Brandon Evans, SA News Editor
 Khanchit Khirisutchalual
Palantir (NASDAQ: PLTR) and Salesforce (NYSE: CRM) appear well positioned to take the lead among software firms in monetizing artificial intelligence applications headed into 2025, according to Wedbush.
AI spending among enterprises is expected to take up a larger share of IT budgets in 2025.
"Palantir has been a major focus during the AI Revolution with expanding use cases for its marquee products leading to a larger partner ecosystem with rapidly rising demand across the landscape for enterprise-scale and enterprise-ready generative AI," said Wedbush analysts, led by Daniel Ives, in a December 26 note.
"We believe Palantir has a credible path to morph into the next Oracle ( ORCL) over the coming decade, with AIP leading the way as many on the Street continue to be huge skeptics of the Messi of AI," Ives added.
Indeed, Seeking Alpha and Wall Street analysts, as well as Seeking Alpha's Quant system, all currently rate Palantir as a Hold.
Julian Lin, Investing Group Leader for Best Of Breed Growth Stocks, goes further, giving the Alex Karp-led firm a Strong Sell rating on December 24.
Palantir has been a strong AI software play with strong supporting metrics. The company ended the third quarter with $4.6B in net cash with no debt and 30% year-over-year revenue growth, including a 54% increase in the U.S. commercial sector. Its share value has increased more than 380% in 2024.
However, its extremely high valuation is what concerns Lin.
"Palantir Technologies trades at 65x sales, making it the most egregiously valued stock among growth peers," Lin said. "Despite strong revenue growth and GAAP profitability, the Palantir stock valuation is unsustainable even under the most optimistic growth scenarios."
Meanwhile, Wedbush also finds Salesforce well-positioned to take advantage of AI monetization in 2025 with its Agentforce offering. Ives said Salesforce shares could increase by up to $80 over the next 12 to 18 months.
"With the goal of accelerating the path to building next-gen AI agents grounded in customer data to lower costs and increase automation for businesses, Agentforce 2.0 is looking to enable AI to perform advanced actions for humans with elevated trust layers built in for agents paving the way for a new era of digital labor," Ives added. |
