🤖 Better Artificial Intelligence Stock: Palantir vs. UiPath 🤖

4 months ago
45

🌟 Key Points: 🌟
- Palantir’s revenue accelerated again as its profits soared.
- UiPath’s growth stalled out as it faced macro and competitive challenges.
- The pricier stock should be the better buy for the foreseeable future.

🌟 Palantir vs. UiPath Overview: 🌟
- Palantir (PLTR) and UiPath (PATH) represent two different ways to invest in the growing artificial intelligence (AI) market.
- Palantir mines data from disparate sources to help its government and commercial clients make data-driven decisions.
- UiPath’s software robots help companies automate repetitive tasks.

🌟 How Palantir Proved the Bears Wrong: 🌟
- Palantir was founded over two decades ago in response to the Sept. 11 attacks and was partly funded by the CIA's Q-Tel venture arm.
- It was used to track down Osama bin Laden in 2011, and most U.S. government agencies now use Palantir’s Gotham platform.
- The company also offers the Foundry platform for large commercial customers.
- Palantir initially claimed it could grow its revenue by at least 30% annually through 2025 but faced slowdowns in 2022 and 2023 due to uneven government contracts and macro headwinds.
- However, Palantir turned profitable on a GAAP basis in 2023 and expects revenue to increase 23%-24% this year.
- Analysts expect its revenue and GAAP EPS to grow at a CAGR of 22% and 56%, respectively, from 2023 to 2026.

🌟 How UiPath Proved the Bulls Wrong: 🌟
- UiPath gained a first-mover advantage in the robotic process automation (RPA) software market.
- Its RPA tools automate repetitive tasks and analyze data, making it the world's largest RPA software provider.
- UiPath’s revenue surged 81% in fiscal 2021 and 47% in fiscal 2022 but slowed to 19% in fiscal 2023 due to macro and geopolitical headwinds.
- The company expects revenue to rise only 9% in fiscal 2025, blaming the slowdown on the macro environment and the adoption of newer generative AI tools.
- Analysts expect UiPath’s revenue to grow at a CAGR of 11% from fiscal 2024 to fiscal 2026 but expect the company to remain unprofitable on a GAAP basis.

🌟 The Better Buy: Palantir: 🌟
- Palantir’s stock is pricier but has shown strong growth and profitability.
- UiPath’s growth has stalled, and it faces significant challenges in staying relevant in the AI market.
- Palantir is larger, growing faster, more profitable, has a wider moat, and has been added to the S&P 500 index.
- While neither stock is a rush buy, Palantir is the better choice for long-term investment.

🌟 Investment Insights: 🌟
- The Motley Fool Stock Advisor analyst team has identified 10 stocks with high potential returns.
- UiPath was not on the list, but the team’s track record includes market-crushing outperformance.
- Consider the potential for significant returns when investing in AI stocks.

📚 Reference: 📚
- The Motley Fool Stock Advisor’s total average return is 799%, compared to 170% for the S&P 500.

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