Those who offer trading services software or manage day trading communities typically have little interest in a company’s fundamentals—they rarely consider operating cash surplus, the founder’s background, competitive advantages, or possibly if revenue and earnings are growing. instead, their focus is on short-term price movements, aiming to capture small gains within a day or seven-day period before jumping to the subsequent opportunity.
there’s nothing inherently issue with that approach. some traders actively trading around key occasions, such as financial disclosures, or utilize technical analysis to enter and exit positions within days, weeks, or even hours. it’s a tougher game compared to value investing, and while i’m skeptical of some chart-based strategies that intraday investors depend on, at its core, it’s just another way to interpret market sentiment—trying to anticipate shifts in trader emotions by analyzing patterns or past stock movements.
it certainly works at times, and some traders excel at it more than others. my main concern is that it can attract inexperienced investors who treat it like gambling without fully understanding the risks. but in the end, everyone makes their own choices. you’re likely not a teens, nor am I your father, nor am I here to dictate what type of market participant you ought to be.
Got a bit sidetracked there. my main point is that while i focus on research on specific companies and pay attention to newsletters recommending stocks based on business insights, traders who sell “systems” and “investment platforms” also use stock teasers to market their subscriptions. they’ve borrowed this tactic from fundamental research newsletters—so even if stock analysis isn’t really their specialty, they still package “special reports” on certain companies to offer entry into their trading rooms, day-trading memberships, or whatever tools they’re pushing.
Ross Givens Ross Givens possesses employing this strategy for the past few years, using promotions such as His so-called “AI Breakthrough Pick” and “Top Technology Pick of the Ten-Year Period” (RBLX) to draw people into his “Real-Time Trading Hub” market discussions. It must be working well, considering how frequently these ads show up in my inbox.
After a rather lengthy introduction, let’s get to the teaser that caught my attention today—this time from a media outlet publisher I haven’t covered before. StockEarnings.com, a company which has been around for roughly five years, sells trading systems aimed at capturing 5-10% gains through buying and selling equities or derivatives based on earnings cycles announcements. The founder, Hiral Ghelani, is using a familiar marketing playbook, teasing a report titled—no shocker here—“Top Artificial Intelligence Pick for 2024” to attract new subscribers. Their website also provides some complimentary tools for screening to forecast stock movements around earnings, but beyond that, I don’t know much about them. This latest email campaign is yet another example of how they’re leveraging AI hype to grow their mailing list and push subscriptions.
He claims that AI has already enabled small business owners to both manage their businesses and test business simulations. However, it’s unclear what specific investment he is referring to.
Here’s the way he teases it…
It appears that someone is offering a report in return your email, which means you may not need to subscribe to their paid services. However, it is likely that the so-called “report” mainly includes graphs and statistics on how the stock has performed in response related to previous earnings statements. In case you were simply curious about the number one Artificial Intelligence Shares for 2024, we can confirm that it is Palantir (PLTR), based on the clues provided.
It seems like you’re discussing the popularity of a certain stock which has been a favorite of investors since NVIDIA’s AI earnings report during in May 2023. This report is said to have sparked a widespread interest in the potential of AI technology, which was previously evident in the introduction of ChatGPT towards the end of 2022. However, NVIDIA’s earnings report was the catalyst that turned AI enthusiasm into a complete-fledged stock market frenzy.
Palantir has long been a favorite in the AI space. For over a year, Dylan Jovine is known for being actively promoted the stock, and other well-known experts, such as Luke Lango and Shah Gilani, have also given it their backing. When Palantir became publicly traded in 2020., it quickly became the most anticipated stocks, largely due to its reputation for providing data-driven provided data analysis to intelligence agencies.. After a sharp post-IPO rally in 2021 followed by a downturn in 2022, investor expectations were recalibrated for two main reasons. First, Palantir expanded its customer base to include more private sector clients, which sparked renewed optimism about its growth. Second, the company began to highlight its AI capabilities with more emphasis, which helped restore confidence among investors.
While Palantir did announce their highest earnings in February. It would not be entirely accurate to claim that their “initial profitable quarter.” In reality, they achieved adjusted profitability over a year prior, with GAAP profitability only realized in Q4 of 2022. That said, 2023 marked their first complete year of achieving GAAP profitability. Moreover, in their most recent quarter, they reported having 375 firms clients.
This company partners with various public sector organizations and major corporations, offering software that extracts, processes, and examines data to deliver valuable insights for decision-making. Their AI Platform (AIP) serves as the foundation for much of their work. However, grasping the full scope of their services can be complex. I recommend visiting their website and reviewing their case studies to get a clearer understanding of their customer projects. They have a well-defined strategy to position themselves as the top enterprise-level “AI” firm, and their continued success in securing significant new clients suggests that this approach is paying off.
The question of how the valuation looks for Palantir, a company which operates in the market of AI, is somewhat difficult. The company’s current valuation is $54 billion, which is similar to its peak in 2021’s market. However, Palantir has grown significantly over the previous three years, and it has doubled its revenues. Currently, it trades at 25X sales, which is a reduction from its previous peak of more than 40X earlier in 2021. According to the estimates of analysts, Palantir is expected to report around $0.33 in normalized profits this year, while it’s currently valued at approximately earnings multiple of 74X. It’s worth noting that the company’s GAAP earnings stand at 14 cents, as Palantir still has a considerable amount from equity-based compensation, that they exclude from their adjusted profits.
The article discusses Palantir as a company that requires faith in its potential growth for investors to be interested in its stock. Palantir has been perceived as a advisory firm due to its significant dependence on government contracts, which is a low-margin business. However, many investors believe that Palantir will grow into a software firm, which will eventually lead to higher margins, improved cash flow, profitability.
Palantir has managed to retain its customers quite well, especially its government and security sector clients. Although the company is still shrouded in mystery and its Andrew Karp (CEO) has been a divisive figure among certain investors, he excels at promoting the company’s narrative. They are projecting nearly billion dollars in adjusted available cash flow the current year, signaling positive momentum. However, the main risk lies in the high valuation; paying a premium often comes with the expectation of considerable market fluctuations due to news turns even slightly unfavorable. With a price-to-sales ratio of over 25X, 50 times the anticipated available cash flow, 75 times the modified earnings, there’s limited cushion for any disappointment.
Certainly, many well-known growth stocks share similar traits right now. Personally, I own a few firms that I believe are currently overvalued. Palantir, on the other hand, presents an intriguing case. It’s a company where one can at minimum envision the potential for growth that could allow them to justify their existing valuation. I nearly made a purchase more than a year back when the stock appeared to be trading at a reasonable price, but ultimately I didn’t follow through. This decision has likely caused me to become somewhat “anchored” to the point where I find it hard to shake off the idea that I missed an opportunity When its price was under 10 times sales. However, that’s my personal bias, and you don’t need to carry the same mental blocks—I’m sure you have your hold to contend with. So, consider this an opportunity to reassess: Do you believe Palantir will emerge as leader in company AI? Do you foresee continued growth in its corporate customer base and cash flow? In case you are confident in those factors, then the elevated valuation should only imply the need for patience, as well as the possibility of significant fluctuations in stock cost at the time when the market sentiment changes.
We’ve gone through more than 50 AI-related stocks suggested by different newsletters, and many of them are riding the same wave of optimism surrounding AI’s potential and continuous corporate investment in AI. This could keep propelling the sector upwards, but bear remember that that these high-profile speculative stocks…often move together. In case your portfolio becomes too concentrated on one narrative, the volatility might be higher than expected.
If you’re considering investing in a variety of “AI” shares, it’s crucial to have a strategy in place for handling potential shifts in market sentiment. Will you sell in case they reach a cut loss? Hold as long as certain conditions are met? Or buy more in case you believe the company remains strategically placed? Your approach will be unique to you, but having a clear plan is essential—without one, the most common outcome in speculative market frenzies is buying at high prices and selling at lows.
Take Palantir (PLTR) as an example—many investors, as well as skeptics, have strong opinions about the stock. If you have insights on whether it’s a worthy investment or a stock to avoid, feel free to share your thoughts in the comments.
