Investors are increasingly recognizing artificial intelligence (AI) as an area of growth and potential gain. Through various ETFs, Ark Invest, led by CEO Cathie Wood, has invested in numerous AI stocks, including Tesla, Zoom Video Communications, and UiPath. Following the announcement of its AI platform, Palantir AIP, earlier this month, Ark has bought more than four million Palantir stock shares, leading to speculation that it could become one of Ark’s top holdings by 2028.
Cathie Wood is the CEO of Ark Invest, a public investment firm focusing on innovation and technology. In October 2020, her firm began investing in Palantir Technologies (PLTR-2.43%), a company known for its analytics and big data technology. Though Ark had held more than thirty million shares in February 2022, the firm sold its entire position due to competitive positioning concerns. However, when Ark resumed investing in Palantir following the announcement of Palantir AIP, its new AI platform, it bought back almost 6 million shares. This shows Ark’s confidence in the potential of AI and Palantir’s technology.
The stock price of Palantir has been volatile, but it demonstrated impressive growth in the first quarter of 2021. In terms of financials, the company reported its second consecutive quarter of positive net income and likely expects to remain profitable throughout the year. Also, the company’s share count at its peak had grown to more than 37 million and although the price-to-sales (P/S) ratio of 12 is near historic lows, it appears to have inspired buying in the stock.
In addition to the financial performance of the company, Palantir’s AIP is a unique offering with no real competitors. AIP is an AI-driven platform that enables enterprise-level audits and operations, is customizable and provides AI-powered insights in real-time. This technology could gain a strategic position in the future and possibly become a top holding with Ark Invest in a few years.
However, much is still unknown and investors need to do their own research before investing in any stock. Consequently, there is no guarantee Palantir’s AI-driven technology will live up to its potential. If Ark does continue investing in Palantir, it could potentially increase returns, leading to more investors buying stock and eventually become a top holding.
