There is no doubt about it. Get dressed (NASDAQ: PLTR) 2024 was one of the biggest success stories in the stock market.
With one day left in the calendar year, Palantir shares are up a whopping 349% year-to-date.
Almost everything has gone right for the software stock. Its earnings growth has accelerated over the past few quarters, and its operating margin also expanded. Along the way, the company received a reception S&P 500: and: Nasdaq-100. The company appears to have transitioned from a niche data fusion company that primarily served government clients to one that was rapidly embraced by commercial clients and the use of artificial intelligence (AI) and more broadly.
Along the way, however, Palantir’s valuation has inflated significantly.Even after a modest pullback, the stock is now trading at an all-time high price-to-sales ratio of 72. That means even if its earnings were as high as its sales, it would still be twice as expensive as the S&P 500. If its growth slows.
There are better stocks for investors to buy over the next five years. Read on to see two of them.
Image source: Getty Images.
Axon Enterprise: (NASDAQ: AXON) He also unveiled a 2024 blockbuster that saw its shares up 134% through Dec. 30, benefiting from similar trends in Palantir.
Like Palantir, Axon is expected to benefit from the incoming Trump administration’s policies. things like evidence and records.Investors expect law enforcement spending to increase under Donald Trump because of proposals like mass deportations and Axon figures will be a winner.
The stock rose 4% the day after the election and rallied the following week on earnings growth and growth.
With a market cap of $46 billion, Axon is much smaller than Palantir, which is now worth $175 billion, but a lot can change in five years, and Axon is also harnessing the power of AI, showing the industry Its prowess in innovation now dominates. It even built Axon AI in 2017, showing it’s ahead of the technology curve.
Earlier this year, it introduced Draft One, an AI-powered tool that generates draft reports directly from body camera footage, saving officers valuable time.Investors should expect similar advancements from Axon over the next five years, boosting revenues and profits.
Axon is expensive, trading at a price-to-sales ratio of 24.3, but that’s still much cheaper than Palantir. With a clear path to growth and margin expansion, Axon is still poised for solid growth over the next five years, while Palantir- is likely to face significant multiple compression.By 2030, I think Axon will be the most valuable company.
Another long-time winner on the market MercadoLibre (NASDAQ: MELI)a Latin American e-commerce and digital payments company. The stock has risen nearly 6,000% since its 2009 IPO, delivering consistently strong growth.
MercadoLibre has followed a similar path Amazon:develop the core business as a direct e-commerce retailer before focusing on higher-margin businesses such as digital payments, a third-party marketplace, brick-and-mortar merchant outlets, advertising and other features that include a delivery service called MeracdoEnvios; asset management called MercadoFondo; and a consumer lending business called MercadoCredito.
MercadoLibre’s competitive advantages are evident in its rapid growth, expanding margins, and the fact that it has withstood competition from giants such as Amazon and. Sea Limitedof Shop.
Looking ahead, MercadoLibre still has a lot of open space opportunities in Latin America as it penetrates key markets including Brazil, Mexico and Argentina and expands elsewhere in the region.
The stock now has a market cap of $87.3 billion, making it a reasonable candidate to overtake Palantir in the next five years at half of Palantir’s current valuation.MercadoLibre is also much cheaper, with a price-to-sales ratio of just 5 , and the price-to-profit ratio is 61.
Given that its revenue rose 35% in the third quarter, the stock has plenty of room for upside if it can maintain its momentum over the next five years.
Before buying shares in MercadoLibre, consider the following:
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John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of The Motley Fool’s board of directors. Jeremy Bowman has positions in Amazon, Axon Enterprise and MercadoLibre The Motley Fool has positions in and recommends Amazon, Axon Enterprise, Palantir Technologies and Sea Limited a disclosure policy.
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