We recently compiled a list of the 12 Best Growth Stocks to Buy and Hold for the Long Term. In this article, we are going to take a look at where Palantir Technologies Inc. (NASDAQ:PLTR) stands against the other growth stocks.
What’s the Bull Case for US Equities?
The market closed last week mostly lower, however, the S&P 500 has been up more than 7% since April 11, indicating a returning positive sentiment. On May 10, David Lefkowitz, Equity Strategist at UBS Global Wealth Management, joined CNBC to discuss his bull case for the US equities. Lefkowitz acknowledged the volatility that has been around since the tariff announcement; however, he believes that backdrop remains fairly constructive. He elaborated that the market has had some significant buy signals since early April, characterised by the volatility index giving one of the highest readings, investor sentiment being cautious, and investor positioning has been depressed. Historically speaking, whenever these things have happened in the past, the US equities have performed exceptionally well in the preceding 6 to 12 months. Lefkowitz noted that he is not too concerned with the day-to-day news and volatility, as the market will get choppy on trade negotiation deals. Rather, he is more focused on the bigger picture, which indicates that stocks will ultimately end up higher over the next 12 months.
While answering a question regarding the recent rebound in the market, Lefkowitz highlighted that when the volatility index comes down, as it has over the past few weeks, history tells us that the market does not make new lows. Although the market will still be chopping a little. However, it is anticipated to stay within the historic average of 5%. Moreover, the equity strategist is also not concerned about the valuations and believes that as soon as the companies start posting earnings growth, the backdrop will help the market reach its next high.
While talking about his most convicted sectors, Lefkowitz noted that he likes secular growth stocks. He elaborated that growth as a sector was hit earlier this year due to doubts regarding AI trends and its ability to generate a return on investment. This has resulted in the sector being at the bottom of the market. However, Lefkowitz believes that the demand for AI products and the sophisticated infrastructure will keep growing for at least the next few years, thereby generating sustainable earnings growth.
Our Methodology
To compile the list of 12 best growth stocks to buy and hold for the long term, we used the Finviz stock screener, Seeking Alpha, and Insider Monkey’s Q4 2024 hedge fund database. Using the screener, we aggregated a list of growth stocks that have grown their sales by at least 30% over the past 5 years. Next, we cross-checked the 5-year sales growth for each stock from Seeking Alpha and ranked the stocks in ascending order of the number of hedge fund investors.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A software engineer manipulating a vast network of code on virtual monitors.
Palantir Technologies Inc. (NASDAQ:PLTR)
5-Year Sales Growth: 30.90%
Number of Hedge Fund Holders: 64
Palantir Technologies Inc. (NASDAQ:PLTR) is a technology company that focuses on big data analytics and data platforms. It operates through four main platforms, including Gotham, Foundry, Apollo, and the Artificial Intelligence Platform.
On May 7, analyst Tyler Radke from Citi maintained a Hold rating on the stock with a price target of $110. The analyst acknowledged the company’s promising developments, such as its expanding consumer demand and multiple new customers. This was evident from Palantir Technologies Inc.’s (NASDAQ:PLTR) Q1 2025 results. The company grew its total revenue by 39% year-over-year to reach $884 million. It closed 139 deals valued over $1 million and also marked the highest quarter of US commercial total contract value of $810 million, reflecting a 183% increase year-over-year. Lastly, the total customer count, as acknowledged by the analyst, also grew 39% year-over-year.
However, despite the impressive performance, the analyst remains cautious about Palantir Technologies Inc. (NASDAQ:PLTR) due to the ongoing macroeconomic uncertainties, which could impact its growth trajectory. The management remains confident in its ability to tackle the challenges and has raised the full year revenue guidance to $3.890 billion and $3.902 billion. It is one of the best growth stocks to buy and hold for the long term.
Ithaka US Growth Strategy stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q1 2025 investor letter:
“From the front-lines of warzones to Fortune 500 enterprises, Palantir Technologies Inc. (NASDAQ:PLTR) builds software to address high-level action items, respond to defense and security concerns, and improve organizational efficiency. The company offers a number of software products from data analysis and curation (Palantir Gotham and Foundry) to a cloud-based operations software (Apollo). The company rose to popularity, in part, due to several government contracts (~55% of revenues) arising from recent and continuous global conflicts. In addition to creating generative AI defense solutions for governments across the globe, commercial customers (~45% of revenues) have flocked to the company’s security and data analysis solutions to monitor and analyze business data and protect sensitive information. The stock’s rise in the quarter was due to a strong earnings report that beat Street expectations as well as investor excitement with regard to the company’s ability to further monetize its AI product across its growing customer base.”
Overall PLTR ranks 7th on our list of the best growth stocks to buy and hold for the long term. While we acknowledge the potential of PLTR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PLTR but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.