What’s the hottest S&P500 2024 stock? Palantir Technologies (NASDAQ:PLTR) is the absolute winner. Shares of the artificial intelligence (AI) and data analytics software provider have skyrocketed more than 320% year to date.
Thanks to this impressive performance, Palantir’s market cap now hovers around $165 billion. But I suspect Palantir’s momentum could quickly wane. Here are two stocks that I predict will be worth more than Palantir in five years.
Intuitive surgery (NASDAQ: ISRG) It may seem like a choice that is too easy to make. The robotic surgical systems maker already has a market cap of about $194 billion, well above Palantir’s market cap. But I think Intuitive Surgical is now not only bigger than Palantir; I predict it will become bigger in the future too.
This stock has done quite well in 2024, although its performance has not been on the same level as Palantir’s. Intuitive’s installed base of da Vinci surgical systems increased 15% year over year in the third quarter of 2024. The number of procedures increased by 18%. More installed systems and more procedures ensure strong sales and profit growth for the company.
Intuitive Surgical should continue to grow in the coming years thanks to a major demographic tailwind. The population in the US and many other countries around the world is aging. As people get older, they are more likely to need surgery. This should translate into accelerated volume growth of procedures for Da Vinci.
In 2023, approximately 2.2 million procedures were performed with da Vinci. Intuitive Surgical Estimates Approximately 7 million procedures are performed each year for which the company already has products and approvals. However, three times as many soft tissue operations are performed each year. This presents a huge opportunity for the company.
The biggest knock against Intuitive Surgical is its rating. Shares of the robotic surgery systems leader trade at about 69 times forward earnings. However, compared to Palantir’s forward profit margin of 161, Intuitive Surgical looks cheap.
You may think I’m crazy, but I predict that too Pfizer (NYSE:PFE) will be worth more than Palantir in five years. The drugmaker’s current market cap of $145 billion is well below Palantir’s. Pfizer stock has fallen this year, while many stocks have soared. So what is my logic behind this contrarian call?
My opinion is that Pfizer is one of the most undervalued stocks, while Palantir is arguably overvalued. The shares trade at just 8.6 times forward earnings. That’s half the expected earnings of the average S&P 500 healthcare stock. Pfizer’s price-to-earnings-growth (PEG) ratio based on five-year earnings growth forecasts is a super low 0.18, according to the financial markets infrastructure and data provider. LSEG.
