1 Unstoppable Artificial Intelligence (AI) Stock to Buy Before It Soars 178% to a $1 Trillion by 2028, According to 1 Wall Street Analyst

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It’s indisputable that the rapid progress in artificial intelligence (AI) has been a dominant factor fueling tech stocks recently. Intriguingly, eight out of the top 10 most valuable global companies have strong connections to AI, and numerous others are swiftly rising in value.

Technology giant Nvidia (NVDA) has just clinched the lead in a global sprint to reach a market capitalization of $4 trillion, making it the world’s first company to achieve this milestone. Microsoft and Apple are hot on its heels with market caps of $3.8 trillion and $3.2 trillion respectively, while Amazon and Alphabet follow closely behind at $2.4 trillion and $2.3 trillion in valuation each.

It might appear too soon to propose that Palantir Technologies (PLTR), with a market capitalization of only $359 billion, could join the elite $1 trillion club. However, while numerous firms are still formulating their AI strategy, Palantir has already crafted a distinctive and lucrative approach in this field.

Decades of AI expertise

Palantir became a publicly traded company in 2020, but it’s been creating AI technology behind the scenes for over 20 years. Initially, it honed its skills developing AI tools for the U.S. government and its partners. Now, however, it concentrates on enterprise solutions that offer businesses practical insights based on intelligent analysis.

Since Palantir has been deeply involved in the relevant field for many years, it’s only natural that they were well-positioned when generative AI became prominent towards the end of 2022. Swiftly seizing the opportunity, they created their Artificial Intelligence Platform (AIP), a tool that employs generative AI to address unique business challenges. Yet, it was their innovative strategy that truly showcased their brilliance.

Palantir conducts practical training sessions, often referred to as boot camps, where they showcase the effectiveness of Artificial Intelligence (AIP) and tailor strategies to suit individual customer requirements. In these interactive workshops, users collaborate with Palantir’s engineers to develop solutions for real-world business challenges.

This approach significantly boosted Palantir’s earnings. In the first quarter alone, Palantir reported a revenue of $884 million, representing a year-over-year growth of 39% and a 7% increase from the previous quarter. However, this figure only provides a partial perspective. The primary factor behind this success was the surge in its U.S. commercial revenue, which climbed by 71% to reach $255 million, accounting for 29% of total earnings. This impressive growth can be attributed to a high demand for AIP.

In the final quarter, the segment reported a contract worth $810 million, marking a 183% increase compared to the same period last year. This significant growth contributed to Palantir’s escalating unrecognized sales obligations, which increased to approximately $1.9 billion, representing a 46% surge. This data offers valuable foresight into future performance, as the company has yet to include this income in their reported revenue.

Moreover, Palantir has revised its projections once more, now predicting a minimum growth of 68% in the U.S. commercial sector (that encompasses AIP) by 2025. This is an upgrade from its previous expectation of 54% growth.

The path to $1 trillion

Since the emergence of generative AI at the end of 2022, Palantir’s proficiency in artificial intelligence and its knack for meeting the rising need for AI technologies has significantly benefited both the company and its shareholders, leading to a remarkable increase of 1,920% in stock value. This growth may only be the start.

Based on Wall Street predictions, Palantir is expected to reach sales of around $3.9 billion by 2025, which equates to a forward price-to-sales (P/S) ratio of approximately 91. If we assume that the P/S ratio remains consistent, Palantir would need to increase its annual revenue to nearly $11 billion to sustain a market cap of $1 trillion.

Analysts predict an impressive annual revenue increase of approximately 34.3% for Palantir Technologies over the next five years. If this growth rate holds steady, the company could achieve a market capitalization of $1 trillion by 2029. However, some experts speculate that Palantir’s growth might even speed up further, suggesting that the predicted timeline may be on the conservative side.

Instead of just trusting my opinion, consider this: Wedbush analyst Dan Ives has calculated the figures and predicts that Palantir’s market value could reach an astounding $1 trillion by 2027 or 2028. He explains this forecast by pointing to the ongoing AI revolution, which he believes will fuel growth. Furthermore, he asserts that individuals who only focus on valuation have overlooked every groundbreaking tech stock in the last two decades. Ives has also publicly stated that Palantir’s AIP U.S. commercial business has the potential to generate revenue of $1 billion or more over the next few years, a point he feels is being underestimated by the investment community.

In the previous nine consecutive quarters, Palantir’s income and earnings per share have consistently grown at an increasing pace, which aligns with the suggested perspective.

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The fly in the ointment

It’s crucial to note that due to its high valuation, Palantir’s stock might be quite risky for value investors. The stock is currently priced at 91 times its future sales and an astounding 207 times its next year’s earnings. Such high multiples typically result in significant volatility, and Palantir is no exception. This means the stock may experience large fluctuations, both positive and negative, making it potentially unsuitable for timid investors. For those interested but cautious about the valuation, they could consider purchasing a modest share or employing a dollar-cost averaging strategy to gradually build a position in the company over an extended period.

Various predictions about the capabilities of generative AI exist, but there’s still uncertainty. One moderate prediction values the AI market to potentially expand from $2.6 trillion to $4.4 trillion yearly, as suggested by the global consultancy firm, McKinsey & Company.

Should the company successfully maintain its rapid expansion and ward off potential competitors – a feat I’m confident it can manage – Palantir may reach a market capitalization of one trillion dollars within the coming years, simply by persisting on its existing growth path.

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2025-07-25 11:04