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Billionaires Are Buying 2 Artificial Intelligence (AI) Stocks That Wall Street Analysts Say Can Soar Up to 240% todayheadline

May 31, 2025
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Large asset managers are required to disclose their equity holdings in quarterly Forms 13F. Investors can use those filings to track which stocks billionaires are buying. For instance, several hedge fund managers bought Palantir Technologies (PLTR 7.69%) and Upstart (UPST 1.35%) in the first quarter, as detailed below:

  • Chris Rokos of Rokos Capital Management bought 55,809 shares of Palantir, starting a new position.
  • Philippe Laffont of Coatue Management added 521,887 shares of Upstart, increasing his stake 150%.
  • Ken Griffin of Citadel Advisors bought 902,486 shares of Palantir, increasing his position 204%. He also added 202,094 shares of Upstart, increasing his stake 618%.
  • Paul Tudor Jones of Tudor Investment bought 149,191 shares of Palantir, increasing his position 573%. He also added 13,729 shares of Upstart, increasing his stake 28%.

Importantly, certain Wall Street analysts see tremendous returns ahead for shareholders. Dan Ives at Wedbush Securities expects Palantir to be a $1 trillion company within three years, which implies 240% upside from its current market value of $294 billion. And Dan Dolev at Mizuho Securities recently set Upstart with a target price of $85 per share, which implies 85% upside from its current share price of $46.

Image source: Getty Images.

Palantir Technologies: 240% implied upside over three years

In its earliest days, Palantir built bespoke data analytics solutions for the U.S. intelligence community. But the company now focuses on developing modular software platforms for customers across the commercial and government sectors. Its core products (Gotham and Foundry) let customers integrate complex information and extract nuanced insights with machine learning models and analytical tools.

Importantly, in 2023, Palantir introduced an adjacent Artificial Intelligence Platform (AIP) that adds support for large language models and natural language processing. In other words, AIP lets organizations infuse their data analytics workflows with generative AI. Forrester Research recently recognized Palantir as a technology leader in artificial intelligence and machine learning platforms.

Palantir looked strong in the first quarter. Customer count increased 39% to 769, and the average spend per existing customer increased 24%. In turn, revenue rose 39% to $884 million, and non-GAAP (generally accepted accounting principles) earnings jumped 62% to $0.13 per diluted share. Management attributed the strong performance to demand for its AI platform.

Wall Street estimates Palantir’s adjusted earnings will increase at 31% annually through 2026. That makes the current valuation of 270 times earnings look outrageously expensive.

Investors can look at this stock in two ways: On one hand, I think Dan Ives is right in saying Palantir will be a trillion-dollar company eventually. On the other hand, I also believe the stock is due for a sharp correction.

Patient investors comfortable with volatility can reconcile those opposing views by purchasing a very small position today. And if the stock drops sharply in the coming months, they can consider buying more shares at cheaper valuations.

Upstart: 85% implied upside over one year

Upstart has developed a lending platform that leans on artificial intelligence to help banks and credit unions quantify credit risk more accurately than traditional credit scores. Its business benefits from a network effect in that every data point — whenever a borrower makes or misses a payment — makes its machine learning models more effective.

Upstart reported solid financial results in the first quarter, beating expectations on the top and bottom lines. Loan originations more than doubled, revenue increased 67% to $2.1 billion, and non-GAAP net income was $0.30 per diluted share, up from a loss of $0.31 per diluted share in the same quarter last year.

Nevertheless, Upstart stock crashed after the earnings report, likely because investors are worried about the lending environment. Tariffs imposed by the Trump administration threaten to slow economic growth, perhaps to the point of recession. That would be bad news for Upstart because banks are usually more conservative about extending credit during periods of economic upheaval.

However, that creates an opportunity for patient investors. Wall Street expects adjusted earnings to grow at 195% annually through 2026, which makes the current valuation of 140 times earnings look reasonable. Even if the consensus is overly optimistic, Upstart still lets lenders approve more borrowers at lower rates, which should drive demand for its platform in the long run.

Importantly, Upstart-powered loans originated in the last eight quarters have beat the two-year Treasury yield by an average of 8 percentage points. That very attractive return should bring more lenders to the platform and help the company capitalize on its $3 trillion addressable market. So, while shareholders may not see 85% returns in the next year, given the uncertain economic environment, I expect the stock to perform well over the next five years.

Trevor Jennewine has positions in Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies and Upstart. The Motley Fool has a disclosure policy.

Tags: AnalystsArtificialBillionairesbuyingIntelligencesoarStocksstreettodayheadlineWall
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