Two stocks that have been making headlines this year are Palantir Technologies (PLTR) and CrowdStrike (CRWD), both of which have received attention from the artificial intelligence (AI) movement. While Palantir has seen its stock rise 287% in 2024, CrowdStrike’s reputation took a hit earlier this year after a security glitch caused widespread outages among its customers.
However, despite the setback, the author remains bullish on CrowdStrike’s long-term prospects and believes the company could surpass Palantir in valuation by the next decade. To understand why, let’s take a closer look at both companies’ recent performances and growth strategies.
Palantir has been gaining traction with its AI platform, which has led to a significant increase in customer count and revenue. The company has also shown impressive scalability, expanding margins and generating positive free cash flow. However, its stock price-to-sales ratio is relatively high, raising concerns about valuation sustainability.
On the other hand, CrowdStrike has consistently demonstrated resilience in the face of economic downturns and security challenges. Despite a recent outage, the company’s annual recurring revenue (ARR) has continued to grow, indicating strong demand for its cybersecurity products. Moreover, as investment in cybersecurity becomes increasingly non-negotiable, CrowdStrike is well-positioned to benefit from this trend.
The author argues that while both companies are pricey stocks, Palantir’s valuation is more stretched, and the company needs to prove it can scale into this premium position. In contrast, CrowdStrike’s proven ability to grow during difficult times positions it for long-term success. With cybersecurity investment on the rise, CrowdStrike has a better chance of expanding its valuation and surpassing Palantir in the years to come.
Source: https://www.fool.com/investing/2024/12/07/prediction-this-ai-stock-may-dwarf-palantir