Two analysts disagreed this morning on the attractiveness of Palantir (PLTR) stock during a joint appearance on CNBC.
“Our issue with Palantir has been its valuation,” Morningstar analyst Malik Ahmed Khan said. “The (stock’s) valuation is getting out of hand,” he warned.
The analyst is upbeat about the outlook of the company’s growth in the coming years and its ability to increase its margins during that period. However, Khan believes that its current valuation reflects “unrealistic” expectations about the company’s long-term growth outlook.
Conversely, KranShares Senior Investment Strategist Derek Yan asserted that PLTR has “tremendous long-term potential” as it may become “the go-to operating system for enterprises in the AI age.” Contending that the company has a “$1 trillion opportunity,” Yan believes that the firm’s valuation is warranted, given its strong potential.
Further, Yan thinks that PLTR’s AI platform offers “top-notch security features,” while the firm can benefit from the Trump administration’s emphasis on “efficiency and the digital transformation.”
Yan indicated that the embrace of these priorities by Washington could generate billions of dollars of revenue for Palantir over the long term.
The Recent Price Action of PLTR Stock
In the last five trading days, PLTR has dropped 10%. However, it has still risen 57% in the last three months of trading.
While we acknowledge the potential of PLTR, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.