From Nasdaq, Inc.:

Artificial intelligence (AI) is driving impressive growth for companies, with the potential to boost global GDP by $7 trillion over the next decade. Advanced Micro Devices (NASDAQ: AMD) and Palantir Technologies (NYSE: PLTR) have seen explosive stock gains, driven by AI expectations. But which stock is the better buy?

AMD stands to benefit from the AI hardware market. The chipmaker expects $3.5 billion in revenue from its AI processors by 2024, and the adoption of AI-powered personal computers (PCs) offers even more potential for growth. Analysts forecast 25% annual earnings growth for the next five years.

Palantir leads the AI software market with its Artificial Intelligence Platform (AIP), driving impressive growth in commercial customers and revenue. The company’s strong position in AI software is expected to drive a 17% increase in revenue in 2023, with 85% annual earnings growth forecast over the next five years.

Both AMD and Palantir trade at premium valuations, but Palantir is expected to grow at a faster pace, commanding a higher forward sales multiple. Investor preference for a cheaper stock may favor AMD, but higher-risk investors could consider the potential for Palantir to justify its valuation with stronger growth.

In conclusion, AMD and Palantir offer different paths to capitalize on the growing AI market. While AMD focuses on AI hardware and PC adoption, Palantir’s position as a leader in AI software drives expectations for faster growth. Investors will need to weigh the potential returns against the current valuations and their own risk tolerance when deciding between these two AI stocks.



Read more: Better Artificial Intelligence (AI) Stock: AMD vs. Palantir Technologies