Stocks in Artificial Intelligence Technology: Investments Gen Z Should Consider and Hold for Long-Term
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Want a sneak peek into the future of technology? Let's talk about AI, baby! Here's a simple question to test your beliefs: Are you ready to stake your money on one of the hottest AI stocks for the long haul, even if it means sitting tight for years before the returns start to shine?
If you're a Gen Z investor with a long-term vision, then it might be time to roll the dice on Palantir Technologies (PLTR -7.60%). Buckle up for the ride, because we're talking about a decade-long commitment.
Revolutionizing Business Decisions
Chances are you've heard about corporations collecting digital data for years. The challenge lies in using this data effectively to make intuitive decisions. So where does AI come into the picture?
Well, AI platforms enable businesses of all sizes to achieve the impossible. They can squeeze every ounce of insight from their reams of data – and even generate new data to make predictions.
When it comes to providers for these AI-driven decision-making powerhouses, Palantir Technologies sits at the big leagues. This trailblazer is the cornerstone of the AI software market segment it dominates.
But what does it really do? To put it simply, Palantir is not a consumer-focused platform like ChatGPT or Alphabet's Gemini. While they may offer impressive conversational capabilities, they're no match for the enterprise-level tasks Palantir's platform is built for – such as helping military units manage combat situations, aiding the U.S. Department of Health and Human Services in predicting COVID-19 spread, and assisting companies in identifying efficiency improvements, spotting potential problems, or detecting fraud.
In short, it's not just a chatbot. Palantir's platform can answer questions you've never even dreamed of asking.
There aren't many platforms like this in existence, and those that can compare to Palantir are few and far between.
The Wave of the Future
The technology is here, but are businesses ready to embrace it? The Motley Fool's in-house research reveals that only 6.8% of US businesses currently use AI-powered decision-making platforms. The main bottleneck? Not knowing how to monetize the technology. A recent report from Boston Consulting Group suggests that only 25% of companies who have begun using corporate AI are seeing real value from their investments.
It's coming, though. Precedence Research predicts that the global decision-intelligence software market will grow at an impressive 15.7% annual rate through 2034. As with the PC, ride-hailing, and electric-vehicle industries, adoption will increase as users become more educated about the technology's potential.
Palantir Technologies might not need as much time to gain traction. Analysts project this year's revenue growth to exceed 30%, followed by another significant increase next year. These forecasts suggest that companies are finally embracing advanced AI. The Motley Fool's research indicates that while just 6.8% of US businesses currently use AI tools, this number could jump to 9.3% within 6 months – a 37% increase in half a year.
That's just the beginning. Research firm IDC believes worldwide AI spending will more than double from last year to 2028, reaching a staggering $630 billion annually.
So, Why Gen Z?
So why is Palantir a Gen Z favorite but not Gen X or millennial investors' cup of tea? It's not a bad pick for anyone, particularly those in need of steady retirement income. The recent 34% drop from February's record high serves as a reminder that investing in Palantir can be a volatile ride. Its valuation remains high, making it difficult to pin down a fair price in the short term.
However, the opportunity is real, especially for patient investors willing to wait for the value to materialize. Much like Amazon after its initial public offering, Palantir's growth potential is long, steep, and (nearly) guaranteed – if only because 94% of US businesses are still exploring AI opportunities. As with Amazon, Palantir's growth could continue indefinitely, keeping the stock valued high in the process. It may take years – perhaps decades – for Palantir's profits to catch up with its valuation.
In other words, you've gotta have patience if you're going to jump aboard the Palantir train.
- Gen Z investors might find Palantir Technologies appealing for long-term investments due to its potential growth, despite the volatility associated with the stock.
- AI-driven decision-making platforms, like Palantir's, have the power to revolutionize business decisions by extracting insights from massive amounts of data and generating new data for predictions.
- The global decision-intelligence software market is projected to grow at an impressive rate, indicating the adoption of such technologies will increase as users become more educated about their potential.
- Palantir Technologies, despite its high valuation, could be a practical choice for those ready to invest in the future of AI and finance, given its prominent position in the AI software market and its ability to provide valuable insights beyond that of a typical chatbot.
