What is the hottest S&P 500 inventory of 2024? Palantir Applied sciences (NASDAQ: PLTR) is the hands-down winner. Shares of the factitious intelligence (AI) and information analytics software program supplier have skyrocketed greater than 320% yr up to now.
Due to this spectacular efficiency, Palantir’s market cap now hovers round $165 billion. However I think Palantir’s momentum may quickly wane. Listed below are two shares I predict will probably be price greater than Palantir 5 years from now.
Intuitive Surgical (NASDAQ: ISRG) may appear to be a decide that is too straightforward to make. The robotic surgical-systems maker already sports activities a market cap of round $194 billion, properly above Palantir’s market cap. However I believe Intuitive Surgical is not simply larger than Palantir now; I predict it is going to be larger sooner or later, too.
This inventory has been on fairly a roll in 2024, though its efficiency hasn’t been in the identical league as Palantir’s. Intuitive’s da Vinci surgical system put in base elevated 15% yr over yr within the third quarter of 2024. Its process quantity jumped 18%. Extra put in programs plus extra procedures add as much as sturdy income and earnings development for the corporate.
Intuitive Surgical ought to proceed to take pleasure in development for years to come back because of an essential demographic tailwind. Populations are growing older within the U.S. and in lots of different nations all over the world. As folks age, they’re extra more likely to require surgical procedure. This could translate to accelerated process quantity development for da Vinci.
Round 2.2 million procedures have been carried out with da Vinci in 2023. Intuitive Surgical estimates roughly 7 million procedures are carried out annually the place it already has merchandise and clearances. Nevertheless, thrice that variety of delicate tissue surgical procedures are carried out yearly. This presents an enormous alternative for the corporate.
The largest knock towards Intuitive Surgical is its valuation. Shares of the robotic surgical-systems chief commerce at round 69 occasions ahead earnings. In comparison with Palantir’s ahead earnings a number of of 161, although, Intuitive Surgical appears low-cost.
You may suppose I am loopy, however I additionally predict that Pfizer (NYSE: PFE) will probably be price greater than Palantir 5 years from now. The drugmaker’s present market cap of $145 billion is properly beneath Palantir’s. Pfizer inventory is down this yr when many shares have soared. So what’s my logic behind this contrarian name?
My view is that Pfizer is among the most underrated shares round, whereas Palantir is arguably overrated. Its shares commerce at solely 8.6 occasions ahead earnings. That is half the dimensions of the common S&P 500 healthcare inventory’s ahead earnings a number of. Pfizer’s price-to-earnings-to-growth (PEG) ratio primarily based on five-year earnings development projections is a super-low 0.18, in line with financial-markets infrastructure and information supplier LSEG.
