Analyst Says His AI Stock Models 'Don't Like' Palantir Technologies (PLTR); Valuation Unjustifiable

We recently published a list of 10 AI Stocks Investors Are Monitoring After Tariff Shock. In this article, we are going to take a look at where Palantir Technologies Inc. (NASDAQ:PLTR) stands against other AI stocks investors are monitoring after tariff shock.

The tariff wars and a potential slowdown in AI spending threw water on investors’ AI trade plans and outlook. However, many analysts believe the broader outlook of the industry is still strong.

Ben Bajarin, Creative Strategies CEO, in a latest program on CNBC explained why he is still bullish on the Jensen Huang-led AI giant:

“I think when you look at the technology roadmap … in terms of what they’re doing with Grace Blackwell and Blackwell systems going forward, it’s going to be very, very hard for others to compete. I think they were extremely bullish about how much of the industry—not just the traditional, you know, cloud servers but AI factories and this entirely new infrastructure—and how it is being kind of redeveloped for the AI era. Like, it’s not being built on other things. And so I think when you look at the ecosystem that’s grown around them, they’re deeply entrenched. It doesn’t have any sign of that changing.”

Bajarin said that he sensed “frustration” in Jensen Huang’s tone as the executive feels Wall Street is not modeling the growth potential his company’s AI products truely have.

“And he seems to think that nobody is modeling that in or really understands it. So there’s the—we kind of have a sense of what they’ll sell just product-wise here in 2025, which is where I agree with you. Hard to surprise to the upside to move the stock, but I think he is signaling people don’t understand the magnitude of this opportunity. And I think that’s worth unpacking because there is a lot of growth ahead.”

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

For this article, we picked 10 technology stocks Wall Street is closely watching these days. With each stock, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Palantir Technologies Inc. (NASDAQ:PLTR)

Number of Hedge Fund Investors: 41

Doug Clinton from Intelligent Alpha said in a latest program on Schwab Network that while he believes Palantir Technologies Inc. (NASDAQ:PLTR) is an “incredible” company, the stock’s valuation is hard to justify. The analyst said his AI models

“We use AI to do stock analysis and our portfolio management. We don’t currently own Palantir so AI, at least our models, don’t like Palantir enough to own it. As a human stock investor and someone who’s very interested in AI-related stocks, I would say I neither love it nor hate it, nor am I sick of it. I think that it’s an incredible company. They’ve had tremendous business momentum—right, 50% year-over-year growth in the US. The issue is it just trades at 50 times revenue, and that’s a hard multiple to justify.”

Baron Asset Fund stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q4 2024 investor letter:

“Two software stocks that the Fund did not own, Palantir Technologies Inc. (NASDAQ:PLTR) and AppLovin Corporation, each gained more than 100% and accounted for 52% of the Benchmark’s gain during the quarter. At year end 2024, Palantir was valued at approximately 200 times its expected 2024 earnings, while AppLovin was valued at 80 times. The market cap of each exceeded $100 billion, and the two stocks represented nearly 8% of the Index. Neither company met our criteria for investment. The total impact on relative performance from Palantir and AppLovin was about 7 times higher than we have seen historically for two securities that are unique to the Benchmark, showing just how unparalleled the event was and something that we believe is unlikely to be repeated.”

Overall, PLTR ranks 10th on our list of AI stocks investors are monitoring after tariff shock. While we acknowledge the potential of PLTR as an investment, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PLTR but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.