Palantir's Valuation Surpassed by AMD and ServiceNow Predictions

Palantir Technologies faces potential value challenges as AMD and ServiceNow receive bullish target prices signaling growth. Investors are encouraged to consider market dynamics and stock positioning.

Date: 06-02-2025

AI Rating: 7

Financial Highlights and Market Implications

Palantir Technologies reported robust fourth-quarter results leading to a market cap of $230 billion. However, analysts from Rosenblatt and Citigroup predict Advanced Micro Devices (AMD) and ServiceNow could exceed this valuation within the next year, changing the competitive landscape. AMD’s target price of $250 and ServiceNow's $1,426 suggest significant growth potential.

Advanced Micro Devices (AMD)

AMD recently posted a 24% revenue increase to $7.6 billion. Although it beat fourth-quarter earnings estimates, its data center sales were below expectations. Non-GAAP earnings rose 42% to $1.09 per diluted share, reflecting strong earnings performance despite market share challenges in data center GPUs against Nvidia.

ServiceNow (NOW)

ServiceNow's Q4 revenue rose 21% to $3 billion, with non-GAAP net income increasing 18% to $3.67 per diluted share. Although it narrowly missed sales predictions, its market position remains solid, with a notable recognition for its AI capabilities in IT software management.

Market Expectations and Future Growth

Both companies are projected to see significant earnings growth, with AMD's adjusted earnings expected to rise 43% and ServiceNow’s by 18% over the next four quarters. These projections suggest promising financial futures amid competitive pressures from firms like Nvidia and Arm. Investors may view AMD’s current valuation of 32 times adjusted earnings as attractive, indicating potential undervaluation.

Conclusion

While both AMD and ServiceNow present formidable growth prospects, the investors' sentiment will heavily depend on actual performance versus expectations. The information indicates positive momentum for AMD and ServiceNow, potentially affecting stock prices favorably in the near term.

Stocks: AMD NOW