Despite the recent bullish trend in the stock market, there are compelling opportunities for investors to explore companies trading at substantial discounts compared to their historical highs. Against the backdrop of the burgeoning artificial intelligence (AI) revolution and potential Federal Reserve interest rate cuts in 2024, strategic investments in beaten-down stocks could yield remarkable returns.
If you’re on the lookout for AI-focused growth stocks available at a discount, delve into the reasons why establishing long-term positions in Palantir Technologies (NYSE: PLTR) and Array Technologies (NASDAQ: ARRY) might be a savvy move in the current market landscape.
1. Palantir Technologies: Unlocking the AI Revolution
Palantir Technologies, renowned for its counter-terrorism analytics for the U.S. government, has expanded its services into the business sector. The company’s Artificial Intelligence Platform (AIP), launched in May, has gained significant traction, witnessing a nearly threefold increase in customer count from Q2 to Q3 of 2023.
Despite introducing AIP and engaging in sales and marketing initiatives, Palantir effectively managed operating expenses, which declined 1% year over year to $395 million in the recent quarter. Bolstered by a 17% year-over-year revenue growth to $558 million, the company demonstrated robust earnings and generated free cash flow. Posting a net income of $72 million with a 13% net profit margin, Palantir’s stock, despite a 58% decrease from its high, holds promise for long-term investors looking to align with key players in the AI revolution.
2. Array Technologies: Illuminating the Path to Renewable Energy
Array Technologies specializes in solar energy and offers DuraTrack solar panels known for their easy installation and optimal energy production by tracking the sun’s movement. The company also provides SmarTrack software utilizing machine learning (ML) and AI to optimize tracker block positions based on various conditions.
Although Array’s Q3 revenue declined 32% to $350.4 million, gross profit increased by 14% to $87.4 million due to improved unit pricing and cost-saving measures. With its ML and AI technologies enhancing solar energy production possibilities, Array is well-positioned for long-term growth.
As the Federal Reserve is anticipated to lower interest rates, making renewable energy projects more affordable, Array, trading at under 12 times expected earnings and 1.25 times expected sales, appears attractively valued. Despite a 69% decrease from its high, this renewable energy stock exhibits substantial potential at current prices.
In conclusion, both Palantir Technologies and Array Technologies present compelling opportunities for investors seeking exposure to the AI revolution and renewable energy sectors. With prudent strategies and a focus on long-term growth, these beaten-down stocks could offer substantial returns in the evolving market landscape.
