HomeBusinessWall Street says to buy one AI stock and sell another

Wall Street says to buy one AI stock and sell another

The most popular stock in the field of artificial intelligence (AI) software is undoubtedly Palantir (NYSE:PLTR). Shares are up a whopping 160% this year, dwarfing the performance of the software company they most want to be when they mature: Adobe (NASDAQ: ADBE).

Shares of Adobe are down 15% this year, but it also belongs in the AI ​​conversation because it is heavily involved in the AI ​​image generation and AI video markets. However, despite Palantir’s great year and Adobe’s bad year, Wall Street thinks investors would be wise to sell Palantir and buy Adobe.

Why? Well, the answer revolves around appreciation.

Palantir’s AI platform is designed to provide the most up-to-date information to everyone with decision-making power. It involves processing multiple data streams simultaneously and then harnessing the power of AI to make recommendations. Originally designed for government use, this software has also found its way into the commercial sector.

More recently, Palantir’s new product, Artificial Intelligence Platform (AIP), has gained popularity. With AIP, companies can build generative AI into their business systems, moving AI from a tool that someone could use on the side to one that is integrated into workflows. This is a crucial step because it determines what information a large language model sees and prevents sensitive information from ending up in another company’s database.

Adobe is not as technologically advanced as Palantir. The product suite is the industry standard for graphic design, but Adobe isn’t asleep at the wheel. It has added Firefly to its product lineup, allowing creators to customize images or create new ones with text input. However, many generative AI models already have this capability, so Firefly doesn’t differentiate it.

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Few models can generate AI video, yet Adobe is nearing the full launch of Firefly Video. Now that Adobe is at the forefront of this fundamental change in the way people work, it is not in danger of being replaced anytime soon. However, the stock no longer receives as much respect as it used to.

Both Palantir and Adobe have legitimate investment thesis and are strong AI companies. However, Wall Street is much more bullish on Adobe than Palantir, and I agree.

Wall Street currently has an average price target of $27.67 for Palantir stock, which suggests a downside of about 35%. Adobe’s average one-year target is $621.15, which indicates an upside of about 25% (both consensus targets come from TipRanks).

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