2 Artificial Intelligence (AI) Stocks to Buy Before They Soar 100% and 184%, According to Wall Street Analysts

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It is widely believed that Artificial Intelligence (AI) will be one of the most groundbreaking technologies in human history, and some financial experts on Wall Street consider Palantir Technologies (PLTR) and AppLovin (APP) to be ideally suited to capitalize on these advancements.

  • Dan Ives at Wedbush Securities says Palantir will be $1 trillion company in two or three years. That implies 184% upside from its current market value of $352 billion.
  • Brian Nowak at Morgan Stanley recently increased his 12-month bull-case target price on AppLovin to $700 per share. That implies 100% upside from its current share price of $350.

Here’s what investors should know about Palantir and AppLovin.

Palantir Technologies: 184% implied upside

Palantir creates data analysis software that enables customers to combine, secure, and comprehend intricate information. The related artificial intelligence platform, AIP, operates as a tool for managing large language models orchestration, boosting the automation of data analysis workflows using generative AI. According to Forrester Research, Palantir has been recognized as a leader in AI platforms.

Significantly, Palantir’s platforms establish a continuous learning cycle that not only enhances decision-making but also uncovers progressively valuable information as time goes by. The firm claims its software, which connects data to real-world resources in an ontological manner, stands out for its proficiency in applying AI operationally. In simpler terms, Palantir excels at transforming AI concepts into practical applications faster than most of its competitors.

In the first quarter of this year, Palantir posted robust financial figures. Their revenue jumped by 39%, reaching a total of $884 million – marking the seventh consecutive increase. This growth was driven primarily by a surge in demand from U.S. commercial and government clients. Additionally, their non-GAAP earnings grew by 62% to $0.13 per share. The company’s leadership team also boosted their full-year projection, anticipating a 36% revenue increase for the year ending 2025.

Observing the current market, Palantir’s shares are strikingly expensive, trading at an astounding 325 times its adjusted earnings. This seems rather preposterous, considering the company’s forecasted annual adjusted earnings growth of 30% over the next decade, extending to 2026. Although Palantir might become a $1 trillion company someday, I find it hard to believe it will reach that figure in just two or three years. Therefore, it might be prudent for investors to hold off on buying shares until a more favorable entry point arises.

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AppLovin: 100% implied upside

AppLovin is a technology firm specializing in advertising, primarily assisting game creators in promoting, earning revenue from, and analyzing their apps. However, it’s now also catering to a broader market by offering ad tech software for online retailers. Notably, what sets AppLovin apart is its advanced machine learning ad platform, which Morgan Stanley has labeled as “top-tier.

In simpler terms, AppLovin’s recommendation system (known as Axon) utilizes advanced AI models to connect advertisers with suitable publishers in auctions. This process helps brands get the most value for their ad spending. The more companies that use Axon, the stronger its network becomes, allowing it to collect and analyze more data which, in turn, improves the precision of its targeting capabilities.

AppLovin shared positive financial figures from Q1. Their total revenue jumped by 40%, reaching a massive $1.4 billion, primarily thanks to a robust ad segment. However, there was a drop in sales within the mobile games segment. Despite this, their earnings according to GAAP rose significantly by 149% to $1.67 per share. For the upcoming Q2, they predict an impressive growth of 69% in advertising sales.

Significantly, AppLovin, which has historically operated as a managed service, is currently experimenting with a self-managed platform that gives brands more autonomy. As CEO Adam Foroughi stated to analysts: “It might take several quarters to perfect these tools for widespread distribution. However, when we globally launch the self-managed platform, we anticipate it will unveil a vast opportunity.

Financial experts predict that AppLovin’s annual earnings will increase by approximately 55% until 2026. Given this growth rate, a current valuation of 64 times earnings appears reasonable. It is plausible for the company’s stock to potentially double (100% return) within the next year, as suggested in Morgan Stanley’s optimistic outlook. However, investors should remain confident in owning the stock even if this rapid growth doesn’t materialize immediately.

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2025-07-24 11:30