Aug 11 – The AI race is heating up, and UBS analysts just put two big names under the microscope, Palantir Technologies (NASDAQ:PLTR) and Advanced Micro Devices (NASDAQ:AMD). Both recently posted solid earnings, but UBS sees them on different paths.
Palantir delivered a milestone quarter, crossing $1 billion in revenue for the first time. Sales jumped 48% year-over-year, fueled by its AI Platform and steady flow of government contracts. Big wins included a US Navy project with BlueForge Alliance and a new partnership with Accenture (NYSE:ACN). Cash reserves climbed to $6 billion, and the stock is up a staggering 147% this year. Still, UBS flagged its lofty valuation and kept a “Neutral” rating.
AMD is splashing out in its own AI. Its quarterly revenue increased by 32% to $7.685 billion on the back of a spike in gaming and AI/data center sales. Contracts such as those that see it supplying Nokia with EPYC processors underscore its ever-growing outreach. The competitive advantage of AMD against Intel (NASDAQ:INTC) is the reason why UBS analyst Timothy Arcuri is bullish on the stock with a “Buy” rating and a price target of $210.
Concisely, UBS admires the potential of Palantir but is more inclined toward AMD with its superior risk-reward in the current market of the frenzy of artificial intelligence.
This article first appeared on GuruFocus.