Top AI Shares Predicted to Plunge by Wall Street Experts by 25%
In the dynamic world of artificial intelligence (AI) and data analytics, two companies stand out: Palantir Technologies and BigBear.ai. Let's delve into their recent financial performance and market standing.
Palantir Technologies, with a current market cap of $317 billion, has seen a staggering growth of almost 400% in the past 12 months, pushing its stock price to around $135. The company's price-to-sales ratio (P/S) of 107 is significantly higher than the industry average, raising questions about its valuation. However, Palantir's financial health is robust, as evidenced by its 20% operating margins last quarter, generating $176 million in operating income. Moreover, U.S. commercial revenue for Palantir grew by an impressive 71% year over year in the last quarter, and its total revenue rose 39% to $884 million.
On the other hand, BigBear.ai, currently valued at approximately €1.57 billion, has experienced a 441% growth in the past 12 months, with a share price of $7.75. Despite the expansion of the AI industry, BigBear.ai's growth has been modest. The company's gross margin is 21.3%, significantly lower than typical software/digital companies, and its free cash flow was negative $42 million over the last 12 months. BigBear.ai's P/S ratio is 12, lower than Palantir's 107, suggesting a potentially more reasonable valuation. However, the company's total revenue grew by only 5% year over year to $34.8 million in the last quarter, and it is not considered a leader in its space, according to analysis.
Wall Street analysts have set price targets for both companies. For Palantir, the target is $107.90, compared to its current share price of around $135. For BigBear.ai, the target is $5.83. It's worth noting that BigBear.ai's price target is significantly lower than its current share price, indicating a potential for downward adjustment.
In conclusion, while both Palantir and BigBear.ai have shown impressive growth, Palantir's stock price and P/S ratio suggest a potentially overvalued position. On the other hand, BigBear.ai's lower P/S ratio, modest growth, and negative free cash flow indicate potential struggles compared to its competition. As always, investors are advised to conduct thorough research before making investment decisions.
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