Technology stocks have been on a tear over the past year, with Palantir Technologies (PLTR) and Reddit (RDDT) emerging as standout performers.
- Palantir shares have surged over 250% in the past 12 months, riding the wave of AI adoption.
- Reddit, on the other hand, soared from a 52-week low of $37.35 to a staggering $230.41 in February—a nearly 517% gain at its peak.
However, recent market volatility stemming from Trump’s tariff policies and economic uncertainty has caused both stocks to pull back significantly from their February highs. With prices cooling, is now the time to buy into one of these tech giants?
🤖 Palantir: Capitalizing on the AI Boom
Palantir Technologies is a major player in the artificial intelligence revolution, and its fundamentals continue to impress:
- Revenue Growth: The company closed 2024 with $2.9 billion in revenue—a 29% increase from 2023’s $2.2 billion.
- Profitability: Palantir posted a gross margin of 80% and reported net income of $468 million—more than double its 2023 profit of $217 million.
- AI Expansion: The company’s AI Platform (AIP) has been a hit with enterprise clients, enabling them to implement AI solutions in days rather than months.
- New Ventures: Palantir is tapping into the multitrillion-dollar manufacturing sector with its Warp Speed product, launched in 2024. This AI-powered software optimizes supply chains and resource planning, offering significant growth potential.
🌐 Reddit: Social Media’s Rising Star
Reddit is riding a wave of explosive growth, transforming from a niche forum into a major social media powerhouse:
- User Expansion: In 2024, Reddit ended the year with 101.7 million daily active unique users (DAUq)—a 39% increase year-over-year.
- Market Value: The platform’s market cap now stands at approximately $23 billion, with gross margins of 89.3%, signaling a highly profitable business model.
- Massive Surge: Reddit stock skyrocketed 165% over the past year, driven by strong earnings and market enthusiasm.
🔥 Which Stock Is the Better Buy?
Both Palantir and Reddit offer compelling investment cases, but they cater to different growth narratives:
- Palantir is an AI-driven data powerhouse with solid profitability, expanding margins, and huge potential in manufacturing and defense contracts.
- Reddit, while growing rapidly, is still an advertising-driven social media company. Its future success depends heavily on user growth and ad revenue expansion.
🏅 The Winner: Palantir While Reddit’s growth is impressive, Palantir stands out as the more compelling buy right now.
- Its strong financials, profitability, and AI-driven expansion into manufacturing position it as a long-term winner in the evolving tech landscape.
- Additionally, Palantir’s presence in government and enterprise contracts makes it more resilient to economic fluctuations compared to Reddit’s ad-based revenue model.
For investors seeking long-term growth and exposure to the booming AI sector, Palantir looks like the smarter pick.
