What Is One of the Best Artificial Intelligence (AI) Stocks to Own for the Next 10 Years?
Key Points
Worldwide spending on AI is projected to reach $1.3 trillion by 2029.
Palantir’s AI platform helps businesses become more efficient and save millions of dollars.
Palantir is experiencing exponential growth, making it a potentially rewarding long-term investment.
- 10 stocks we like better than Palantir Technologies ›
Worldwide spending on artificial intelligence (AI) is projected to reach $1.3 trillion by 2029, according to the International Data Corp. This includes spending on hardware, software, and services. On the software side, there is one company that is showing the potential to scale into a monster business over the next decade, and that is Palantir Technologies (NASDAQ: PLTR).
Palantir's AI platform (AIP) is bringing tangible savings to businesses, which allows the company to earn very attractive margins. Its competitive advantage and growth prospects make it one of the best AI stocks to hold for the long term.
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Why buy Palantir stock
Palantir's accelerating growth and stellar 40% net profit margin indicate it faces very little competition for its unique offering. Companies upload their data on Palantir's platforms, and it shows them what they need to do to become more efficient. The company's trailing-12-month revenue of $3.9 billion indicates the aggregate savings businesses are receiving or expect to receive, as spending on its software is an investment to cut costs and increase operating efficiency.
Palantir could scale into a business generating around $50 billion in revenue by 2035, assuming it can maintain about 30% annualized revenue growth. For what it's worth, the consensus analyst estimate has the company growing the top line at 40% annually through 2029. Revenue accelerated again in the third quarter, up 63% year over year, with U.S. commercial revenue up 121%.
Investors should expect some ups and downs in the share price, but buying and holding shares for 10 years could lead to market-beating gains.
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John Ballard has positions in Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
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