AI Stocks May Outpace Palantir: A Skeptic’s Guide to the Future

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Ah, the stock market – that magnificent carnival of hope, delusion, and speculative frenzy. Take, for instance, Palantir Technologies (PLTR). With its fourfold surge in value over the past year and a market capitalization now basking in the glorious sunshine of $422 billion, it’s hard not to feel like an investor in a grand game of roulette. But, as any seasoned skeptic might tell you, don’t get too attached to these numbers. For, by 2030, there’s a fair chance that Shopify (SHOP) and AppLovin (APP) might just be the ones laughing all the way to the bank. What follows is a calculation of sorts, a matter of simple mathematics… or, if you will, a game of high-stakes poker played with numbers.

  • Take Shopify, for example. Currently valued at $205 billion. To match Palantir’s present valuation by 2030, it needs to pull off a 107% increase, which translates to an annual return of 16%. Not impossible, you might say, but hardly a walk in the park either.
  • And then there’s AppLovin, standing at $203 billion. It too must jump 109%, with the same 16% annual return, to reach the illustrious $425 billion mark by 2030. Could this happen? Stranger things have certainly occurred in the market’s fevered bosom.

And who, you may ask, is putting his weight behind this prediction? None other than Philippe Laffont, a hedge fund manager whose performance has, rather conspicuously, outpaced the S&P 500 over the last three years. His belief that Shopify and AppLovin will be counted among the world’s 20 largest companies by 2030, while audacious, deserves a moment’s consideration. But let’s proceed with a grain of salt – or, if you prefer, a barrel of it.

Shopify: 107% Upside – Or, How to Turn E-Commerce into a Global Enterprise

Shopify’s performance, as one might expect, has been dazzling. In the second quarter, the company posted revenue growth of 31%, reaching a rather neat $2.6 billion. But what’s even more delightful is that the growth didn’t restrict itself to North America; it gallivanted across Europe and the Asia-Pacific regions, spreading its tendrils ever farther.

And the bottom line? Well, a non-GAAP net income bump of 35%, or $0.35 per diluted share. While most would say, “Bravo, Shopify,” a skeptic might ask, “What’s the catch?” You see, Shopify, in its wisdom, has positioned itself as the quintessential e-commerce platform, integrating physical and digital storefronts into one tidy package. It’s a bit like the Swiss army knife of the online retail world – but we all know that when something seems too good to be true, it often isn’t quite as perfect as advertised.

Indeed, Shopify has something called “Shopify Magic” – an AI-powered toolkit designed to help merchants generate content, handle customer queries, and even create entire online stores. But the question remains: Can it sustain this magic over the long term, or will it soon find itself in a tangle of overpromise and underperformance?

Nonetheless, if Wall Street’s rosy predictions hold true, Shopify’s earnings are expected to grow at an impressive 30% annually over the next few years. However, with a current price-to-earnings ratio of 88, things could get a tad… overheated. Should Shopify meet these expectations, it may eventually bring its P/E ratio down to 49 by mid-2030. And that, my friends, could lead to a valuation of $425 billion, placing it squarely ahead of Palantir.

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AppLovin: 109% Upside – Betting on AI to Fuel the Fire

And here comes AppLovin, strolling onto the scene with its own brand of flair. The company posted a revenue spike of 77% in the second quarter, bringing in a tidy $1.2 billion. For the skeptics out there, the company also showed an impressive 169% increase in GAAP net income, reaching $2.39 per diluted share. A success story? Certainly. But as with all things that glitter, it’s worth remembering that there’s often a smear of something darker lurking beneath the surface.

AppLovin’s main selling point lies in its cutting-edge AI recommendation engine, Axon, which matches advertisers to the right publishers using the most advanced machine learning techniques. And what does Wall Street think of this? Analysts have lauded Axon as a “best-in-class” engine, capable of benefiting from the rapidly expanding field of generative AI. But the question persists: How long can this “best-in-class” model maintain its shine in a market that is increasingly saturated with AI offerings?

AppLovin, once a mobile-first player, has now expanded into the broader world of e-commerce advertising. The launch of Axon Ads Manager, a self-service platform, further solidifies its ambitions to dominate the advertising space. Early tests suggest promising results, but as always, early results are often the most fickle of things.

Wall Street expects AppLovin to grow its adjusted earnings by 35% annually through 2028. With its current valuation at 85 times earnings, this sounds a bit like a stretch – much like reaching for the stars from a rickety old ladder. Still, if the company can meet those lofty expectations, it may well see its valuation dip to a more reasonable 39 times earnings by 2030, leading to a $425 billion market value and leaving Palantir in its dust.

So, will Shopify and AppLovin reach the lofty heights predicted? It’s certainly possible, but as any market skeptic will tell you, it’s more about managing expectations than managing portfolios. One thing’s for sure: The market, like a poorly scripted play, has a way of surprising its audience. 🎭

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2025-10-21 11:31