Should You Forget Palantir Technologies and Buy These 3 Artificial Intelligence (AI) Stocks Right Now?

Core Viewpoint - The article suggests that while Palantir Technologies has seen significant growth due to its AI applications, its current valuation is excessively high, prompting investors to consider alternative AI companies with better growth prospects and more reasonable valuations [1][2]. Group 1: Palantir Technologies - Palantir Technologies has experienced a remarkable increase of over 1,900% in less than two and a half years, primarily driven by its proprietary AIP platform for AI applications launched in mid-2023 [1]. - Despite its growth potential, Palantir's enterprise value-to-sales ratio is nearly 100, indicating a steep valuation that may not be sustainable [2]. Group 2: Nvidia - Nvidia has established itself as the industry standard in AI chips, with an estimated market share of approximately 77% projected for 2025, benefiting from a massive investment cycle in data centers [4]. - Data center AI chips now constitute the majority of Nvidia's business, and the technology sector is undergoing a generational cycle to support AI development [5]. - Nvidia's stock trades at a price-to-earnings (P/E) ratio of 46, with analysts forecasting an average earnings growth of 35% annually over the long term, presenting a compelling investment opportunity [6]. Group 3: Meta Platforms - Meta Platforms is aggressively pursuing AI initiatives, having developed its AI model, Llama, which has over 1 billion downloads, and integrating AI into its social media applications to enhance engagement and ad revenue [8]. - The Reality Labs segment, which includes Meta's virtual reality and AI projects, is currently operating at a loss, but the core business remains strong, with total daily active users increasing by 6% year over year to 3.43 billion in Q1 2025 [9][10]. - Analysts project that Meta's earnings will grow by over 17% annually in the long term, making its current P/E ratio of 25 attractive for investors [10]. Group 4: Amazon - Amazon, through its leading cloud platform Amazon Web Services (AWS), is well-positioned to benefit from the growth of AI applications, with AWS revenue growing nearly 17% year over year to $29.2 billion in Q1 2025 [11]. - The public cloud market is expected to grow to $3.36 trillion by 2035, with a 17.5% annualized growth rate, providing a significant growth catalyst for Amazon [12]. - Despite recent stock price pressures, Amazon's current P/E ratio of 33 suggests potential for strong investment returns if the company can achieve an annualized earnings growth of 19% as predicted by analysts [13].