I constantly hear about these two stocks for the past months.
Analysts write articles everywhere! Popping on news feeds etc.
Given how they are discussed frequently online, I decided to take a look. Each company is taking advantage of the AI trend. PLTR using AI in their software for counter-terrorism investigations and SHOP using AI to further develop websites for individuals who wish to build an online store for marketing their product.
Each company enjoyed a surge in 2021’s pandemic / stock frenzy time but has since declined after stock correction in 2022. Both are now under pressure by investors’ expectations from the AI trend’s test of practicality. Seems clearcut and reasonable for the hype?
From a technical perspective, both stocks stink. A negative EPS with P/E Ratio of over 200 happening quite often. Recently, PTLR’s EPS hits a positive of 0.09 and SHOP’s EPS a 0.07, not impressive at the least. Their P/E Ratio is most telling with a 260 and 1011 respectively.
Yup, you are reading that correctly, a P/E ratio of over 1000… I haven’t been investing for over 10 years but it is my first time seeing a 4 figure P/E ratio.
TLDR: My conclusion? Confusion. I don’t understand where the hype is and how it is justified based on the technicalities of both companies. Their finances stink and their AI potential seems more of a joining the bandwagon maneuver.
Yet, they are so popular! PLTR has over a 50B market cap and SHOP has over 200B market cap, which put them in a large cap! What is going on? What is everyone’s thoughts on this?
