With the sector’s flagship stock Nvidia Corporation showing signs of exasperation, many investors are having second thoughts. However, astute investors are seeing a buying opportunity in this cooling off.
And not without a reason. With huge investments coming in its infrastructure, AI is expanding like no other sector currently. The two stocks, one each from US and Australia seem to be the high growth stocks in the coming year.
Bigtincan Holdings Limited (ASX: BTH)
Bigtincan Holdings Limited (ASX: BTH), a leader in sales enablement software, has been actively progressing with its business strategy and financial performance. The company achieved significant growth in FY24, reporting a record EBITDA of $11.3 million, up from $4.9 million in FY23, and became free cash flow positive in the second half of FY24. Revenue for the year totalled $117.1 million, though it was impacted by delays in some contracts and a decline in EMEA sales. However, Bigtincan saw strong growth in Australia and made strides in building a robust customer base, with an annualized recurring revenue (ARR) of $116 million. A key development was the launch of GenieAI™, Bigtincan’s AI-powered product, which contributed significantly to the company’s growth.
Bigtincan is focused on organic growth, leveraging its AI-driven products like GenieAI to introduce new industry-specific solutions. The company plans to expand into underexploited international markets, strengthen strategic alliances, and continue developing niche features based on customer feedback. In FY24, Bigtincan also made notable partnerships, including collaborating with Microsoft on its "Works With Copilot" program, integrating its tools with Microsoft 365 Copilot. Additionally, Bigtincan became the first sales enablement application integrated into Apple’s Vision Pro ecosystem, showcasing its innovation in spatial computing and virtual reality technologies to enhance sales experiences.
As Bigtincan moves into FY25, it is optimistic about further growth, projecting improvements in free cash flow, a 20% increase in EBITDA, and growth in ARR. The company is building on the strategic adjustments made in FY24, including a refocused approach on profitable core customers and a strengthened leadership team. Although uncertainties related to the US economy and the presidential election may affect the market, Bigtincan’s continued investment in AI and its customer-centric strategy position it well for future opportunities. The upcoming AGM on 29 November 2024 is expected to provide further insights, especially with ongoing discussions around a proposal by Vector Capital to acquire Bigtincan shares, triggering a matching rights process with current bidder Investcorp AI Acquisition Corp. (IAAC).
Palantir Technologies Inc. (NYSE: PLTR)
Palantir Technologies (PLTR) has emerged as a leading force in the SaaS sector alongside competitors like MongoDB (MDB), Snowflake (SNOW), and Salesforce (CRM). Distinguishing itself with its proprietary Artificial Intelligence Platform (AIP), Palantir delivers advanced data integration and decision-making tools tailored for both enterprises and government agencies. AIP, launched in Q2 2023, allows organizations to harness large language models (LLMs) on proprietary data without incurring the costs of in-house R&D or infrastructure. This innovation has catalyzed revenue growth, solidifying Palantir's position as a top AI software stock in 2024.
As of November 2024, Palantir boasts an impressive 283% year-to-date (YTD) return, driven by robust revenue growth and strategic partnerships. Notably, Palantir has collaborated with Amazon Web Services (AWS) and Anthropic, a Bezos-backed startup. This three-way partnership enables Palantir to offer Anthropic’s Claude AI model on AWS for government clients, enhancing its value proposition. Earlier in the year, a similar agreement with Microsoft (MSFT) underscored Palantir’s deepening relationships with major tech players and the Department of Defense (DoD), affirming its status as a critical enabler of AI solutions for national security and enterprise applications. On the financial front, Palantir reported Q3 revenue of $726 million, reflecting 30% year-over-year (YoY) and 7% quarter-over-quarter (QoQ) growth. Customer count increased 39% YoY and 6% QoQ, while GAAP earnings per share (EPS) doubled YoY to $0.06. Adjusted EPS rose 43% YoY to $0.10, further showcasing operational efficiency. The company's trajectory is built on consistent revenue growth, which has nearly tripled over the past three years, from $1.09 billion to $2.64 billion. Palantir's introduction of AIP marked a significant inflection point, translating into positive operating income—a stark contrast to peers like MongoDB and Snowflake, which continue to grapple with profitability.
Adding to its momentum, Palantir announced its impending move to the NASDAQ from the New York Stock Exchange, effective November 26th. This transition positions PLTR for inclusion in the NASDAQ-100 index, potentially attracting increased institutional investment from funds tracking the index. Investor enthusiasm around this shift is palpable, with many viewing it as a catalyst for sustained valuation growth. Palantir's long-term prospects are underpinned by its differentiated product offering, high-profile partnerships, and a strong foothold in the AI and analytics domain. While some concerns persist regarding its elevated valuation, Palantir's strategic positioning and market traction suggest it is far from a transient "fad" stock. With a track record of outperforming its peers and delivering consistent growth, PLTR is well-suited for investors seeking exposure to AI-driven SaaS innovation.
In conclusion, Palantir’s focus on leveraging AI to solve complex data challenges, its expanding clientele, and its ability to secure strategic partnerships highlight its potential for sustained growth. As a key player in the burgeoning AI sector, Palantir remains a compelling investment with significant upside potential.
Source: Company’s Report
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