Artificial intelligence stocks are expected to benefit from increasing adoption, but two companies stand out – Palantir Technologies (PLTR) and Amazon (AMZN). Despite beating the S&P 500 over the past year, Palantir has a sell rating due to its high valuation. In contrast, Amazon is expected to rise 20% as its strong presence in cloud and AI services drives growth.
Palantir’s recent Q4 results showed 43% customer growth and 36% revenue increase, driven by accelerated sales across commercial and government customers. However, analysts like Brent Thill at Jefferies are concerned about the company’s forward price-to-sales ratio of 56, which they believe is unsustainable.
Thill cites Snowflake as an example, where a similar valuation led to a 70% decline in shares over six months. While Palantir’s sales growth was lower than expected, Thill advises investors to be cautious and considers selling some stock if they’re uncomfortable with potential drawdowns.
On the other hand, Amazon reported solid Q4 results, beating estimates on top and bottom lines. Revenue rose 10% to $188 billion, driven by strong cloud and advertising services growth. Despite guidance that missed expectations, Thill believes investments in AI and logistics capacity will drive durable growth in the coming years.
Analysts expect Amazon’s earnings to increase at 17% annually over the next two years, making its current valuation look somewhat expensive. However, Thill advises patient investors to buy a few shares, citing the company’s strong market position in cloud and AI services.
Source: https://www.fool.com/investing/2025/02/14/palantir-stock-amazon-stock-wall-street-buy-sell