Forecast: These Two AI Stocks May Surpass Palantir Technologies in Value by Early 2026
Palantir Technologies and Market Competitors
Palantir Technologies (NASDAQ: PLTR) has seen its stock value soar by 255% in the past year, elevating its market capitalization to approximately $200 billion. Despite this impressive growth, analysts on Wall Street forecast that Advanced Micro Devices (AMD) and Uber Technologies (UBER) might surpass Palantir’s market cap in the coming year. Below is a look at the predictions and insights regarding these companies.
Advanced Micro Devices: Predictions and Potential
Strong Market Position
AMD designs microprocessors for various applications, focusing on four primary sectors: data centers, consumer computers (including laptops and desktops), gaming consoles, and embedded processors. The company has notably increased its market share in the central processing unit (CPU) territory, especially in client and data center markets, while competitor Intel has been losing its ground.
Despite AMD’s strengths, it has struggled to capture market share in graphics processing units (GPUs), where Nvidia remains the dominant player. However, AMD’s earnings report for the recent fourth quarter revealed a 24% revenue increase to $7.6 billion and a 42% rise in non-GAAP net income, which reached $1.09 per diluted share. That said, AMD fell short of market expectations for its data center sales.
Future Growth Estimates
CEO Lisa Su mentioned during the earnings call that AMD expects its AI-related sales in data centers to increase significantly, projecting revenues to eventually reach "tens of billions of dollars" annually within the next few years. Analyst Jim Kelleher of Argus Research has set a 12-month price target of $160 per share for AMD. This target indicates a potential 52% increase from its current price near $105, bringing its market cap to an estimated $260 billion.
Kelleher believes that AMD’s advancements in client and data center CPUs, along with its growing embedded business and leadership in console gaming, set the stage for robust long-term growth. Investors will want to be mindful, however, as AMD’s valuation stands at 32 times its earnings, but with anticipated earnings growth of 40% by 2025, the current valuation could be seen as appealing.
Uber Technologies: Significant Growth Potential
Leading Market Position
Uber Technologies plays a prominent role in both mobility and food delivery services, operating the largest ride-sharing platform in the U.S. and the second biggest restaurant delivery service based on revenue. Additionally, Uber leads in ride-sharing and food delivery across several international markets.
Uber’s integrated service platform allows it to deliver significant cost savings and enhances cross-selling opportunities between its mobility and delivery services. The increasing scale of operations benefits from a strong network effect; the growth in the number of trips outpaces user growth, indicating higher engagement on the platform.
Financial Performance and Growth Outlook
In its latest financial report, Uber announced a 20% rise in revenue to $12 billion, driven by strong performance in both the mobility and food delivery sectors. The company also reported a rise in its take rates, meaning it retains more revenue from sales on its platform, and adjusted EBITDA witnessed a substantial 44% increase to $1.8 billion.
CEO Dara Khosrowshahi highlighted that autonomous vehicle (AV) technology presents a $1 trillion opportunity for platforms like Uber. Thanks to its unmatched scale and operational efficiency, Uber is in an advantageous position to capitalize on this growth area.
Analyst Mark Mahaney from Evercore has set a 12-month price target of $115 per share for Uber, reflecting a potential upside of 55% from its current share price of around $74. Looking ahead, Uber expects a compound annual growth rate for adjusted EBITDA to remain in the high 30s to 40s over the next three years, making its valuation of 17 times earnings seem attractive.
Summary of Market Predictions
- AMD’s price forecast by Jim Kelleher: $160 per share, 52% potential gain.
- Uber’s price forecast by Mark Mahaney: $115 per share, 55% potential gain.
Both AMD and Uber exhibit unique growth potential driven by their market positions and business strategies. Investors may find opportunities in both companies as they work toward achieving their projected market valuations.
