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Happy belated anniversary, bull market. On Oct. 12, 2022, a new bull market began. Tech stocks led the charge then and are doing so now, fueled by surging demand for anything related to artificial intelligence (AI).

However, the venerable Dow Jones Industrial Average (DJINDICES: ^DJI) is holding its own. The Dow is up close to 47% since the bull market began. Are there still some Dow stocks worth buying? Absolutely. Here are three unstoppable stocks to buy with the Dow at an all-time high.

1. Amazon

Amazon (NASDAQ: AMZN) is a relatively new member of the Dow Jones Industrial Average. The e-commerce and cloud-services giant replaced Walgreens Boots Alliance in February 2024. Amazon has been a great addition to the Dow so far, outperforming many other stocks in the index this year.

Perhaps the best indicator of Amazon’s strength is its rapidly improving free cash flow. The company generated free cash flow of $53 billion in the trailing 12 months ending June 30, 2024, compared with $7.9 billion for the trailing 12 months ending June 30, 2023.

Amazon’s cloud business, Amazon Web Services (AWS), continues to be the company’s most important growth driver. Organizations across the world are migrating to the cloud. AI, especially generative AI, is accelerating this trend. Amazon CEO Andy Jassy said in August that AWS remains “customers’ top choice” thanks largely to its broad functionality.

But Amazon is always looking for new ways to grow. The company has found one with advertising. In the second quarter of 2024, advertising-services revenue jumped 20% year over year excluding foreign exchange, slightly higher than AWS revenue growth. Jassy said in the Q2 earning call that Amazon is “at the very beginning of what’s possible in our video advertising.”

2. The Home Depot

The Home Depot (NYSE: HD) isn’t a newbie in the Dow like Amazon. The leading home improvement retailer joined the index on Nov. 1, 1999. Home Depot has more than quadrupled the Dow’s total return since then and has continued to outperform the index in 2024.

You might not think Home Depot looks unstoppable based on its Q2 results. The company’s revenue rose only 0.6% year over year and would have decreased by 3.3% if not for the acquisition of SRS Distribution. However, this temporary snapshot doesn’t tell the full story about Home Depot’s prospects.

Keep one number in mind with Home Depot: 42. That’s the median age of owner-occupied U.S. homes, according to Statista. With a large number of older houses, the demand for home improvement supplies should remain strong for years to come.

Story continues

Home Depot also has another long-term tailwind. The U.S. continues to face a major housing shortage. Zillow estimates the country needs another 4.5 million homes. Home Depot should have a significant opportunity providing materials to professionals building new homes over the next decade and beyond.

3. Visa

Visa (NYSE: V) joined the Dow Jones Industrial Average on Sept. 23, 2013. The payments-technology company has nearly doubled the Dow’s total return since then.

Granted, Visa has lagged behind the Dow in 2024. This underperformance is due primarily to regulatory issues. In June, a federal judge rejected a settlement between Visa, Mastercard, and retailers over swipe fees. In September, the U.S. Justice Department filed an antitrust lawsuit alleging that Visa is monopolizing debit-network markets.

I’m not sure how these regulatory challenges will play out. However, Visa should remain a dominant force in the payments market regardless of the outcomes.

And that market should continue to grow. Cash is going the way of the dinosaurs as people increasingly use digital-payment methods. Visa could have an especially big growth opportunity as the middle classes expand in developing nations.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $21,266!*

• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,047!*

• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $389,794!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of October 14, 2024

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Amazon and Mastercard. The Motley Fool has positions in and recommends Amazon, Home Depot, Mastercard, Visa, and Zillow Group. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.

3 Unstoppable Stocks to Buy With the Dow at an All-Time High was originally published by The Motley Fool

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HALIFAX, NS, Oct. 15, 2024 /CNW/ – Killam Apartment REIT KMP (“Killam” or the “REIT“) is pleased to announce that its Board of Trustees has unanimously approved a proposed internal reorganization that will be accomplished by way of a plan of arrangement (the “Arrangement“). The Arrangement will be subject to unitholder approval at a special meeting of Killam to be held on November 21, 2024 (the “Meeting“).

The Arrangement will simplify Killam’s organizational structure by eliminating Killam Properties Inc. (“KPI“), a wholly-owned subsidiary of the REIT, so that Killam Apartment Limited Partnership will hold its entire investment in Killam Apartment Subsidiary Limited Partnership (“Killam SLP“) directly, rather than partially through KPI.  In the existing structure, KPI is allocated its share of income and capital gains as a partner of Killam SLP. The Arrangement is expected to reduce or eliminate potential corporate taxation in respect of income and capital gains allocated to KPI, thereby increasing future cash flow for distribution to the REIT. The Arrangement is also expected to reduce the complexity of accounting and legal reporting and of income tax compliance inherent in Killam’s existing structure. The REIT has received an advance income tax ruling of the Canada Revenue Agency in connection with the Arrangement.

The proposed Arrangement will not result in a change to Killam’s strategy, portfolio or operations. After completing the Arrangement, unitholders will continue to hold the same number, type and percentage of outstanding units as they held immediately before the Arrangement and the total number of units outstanding immediately following the Arrangement will be the same as before. The REIT’s trust units (“Trust Units“) will continue to be listed on the TSX and retain the same CUSIP number.

The Arrangement will be effected pursuant to a plan of arrangement under the Canada Business Corporations Act and is subject to the approval of 66⅔% of the votes cast by holders of the Trust Units and special voting units of the REIT (the “Special Voting Units“), voting together as a single class (Special Voting Units are associated with Class B limited partnership units of Killam Apartment Limited Partnership (“Exchangeable Units“), which is controlled by the REIT. The Exchangeable Units are intended to be economically equivalent to and exchangeable for Trust Units on a one-for-one basis and are accompanied by Special Voting Units of the REIT that provide their holders with equivalent voting rights to holders of Trust Units). Trustees and officers of Killam, who control collectively 3.72% of Killam’s Trust Units and Special Voting Units, have indicated their intention to vote in favour of the Arrangement. In addition to the requirement for unitholder approval, the completion of the Arrangement will be contingent on all necessary third party, court and regulatory approvals, including the approval of the Toronto Stock Exchange.

Unitholders who vote in favour of the Arrangement at the Meeting will also be authorizing and approving the adoption of an Amended and Restated Declaration of Trust of the REIT, which includes amendments to the REIT’s current governing Declaration of Trust necessary to effect the Arrangement and other amendments of a minor, housekeeping or clerical nature that are not prejudicial to the Unitholders.

Further details on the Arrangement will be set out in an information circular (the “Circular“) expected to be filed on SEDAR+ at sedarplus.ca and mailed to unitholders on or about October 24, 2024, in advance of the Meeting. Although the timing of the completion of the Arrangement cannot be predicted with certainty, management anticipates the Arrangement to become effective on November 30, 2024.

About Killam Apartment REIT

Killam Apartment REIT, based in Halifax, Nova Scotia, is one of Canada’s largest residential real estate investment trusts, owning, operating, and developing a $5.3 billion portfolio of apartments and manufactured home communities. Killam’s strategy to drive value and profitability focuses on three priorities: (1) increase earnings from the existing portfolio; (2) expand the portfolio and diversify geographically through accretive acquisitions, targeting newer properties and dispositions of non-core assets; and (3) develop high-quality properties in its core markets.

For information, please contact:

Claire Hawksworth, CPA
Senior Manager, Investor Relations
chawksworth@killamREIT.com
(902) 442-5322              

Note: The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein. Certain statements in this press release may constitute forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “continue,” “remain,” or the negative of these terms or other comparable terminology, and by discussions of strategies that involve risks and uncertainties. Such forward-looking statements may include, among other things, statements regarding: the Arrangement and the timing and benefits thereof; the Meeting and the timing thereof; the effect of the Arrangement on holders of Trust Units and Special Voting Units; the approvals required for the completion of the Arrangement; the adoption of an Amended and Restated Declaration of Trust and the terms thereof; the contents, mailing, and availability of the Circular and the timing thereof; and Killam’s priorities.

Readers should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated or implied, or those suggested by any forward-looking statements, including: Killam’s ability obtain the necessary regulatory and third-party approvals, including, among others, court, unitholder and Toronto Stock Exchange approval; risks related to tax legislation and the interpretation and application thereof; the effects and duration of local, international and global events, any government responses thereto and the effectiveness of measures intended to mitigate any impacts thereof; competition; legislation and the interpretation and enforcement thereof; litigation to which Killam may be subject; global, national and regional economic conditions (including  interest rates and inflation); and the availability of capital to fund further investments in Killam’s business. For more exhaustive information on these risks and uncertainties, readers should refer to Killam’s most recently filed annual information form, Killam’s most recently filed MD&A, as well as the Circular, each of which is, or will be, available on SEDAR+ at www.sedarplus.ca. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements contained in this press release. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events may not occur. Although management believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Further, a forward-looking statement speaks only as of the date on which such statement is made and should not be relied upon as of any other date. While Killam anticipates that subsequent events and developments may cause its views to change, Killam does not intend to update or revise any forward-looking statement, whether as a result of new information, future events, circumstances, or such other factors that affect this information, except as required by law.

The forward-looking statements in this press release are provided for the limited purpose of enabling current and potential investors to evaluate an investment in Killam. Readers are cautioned that such statements may not be appropriate and should not be used for any other purpose. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

SOURCE Killam Apartment Real Estate Investment Trust

View original content: http://www.newswire.ca/en/releases/archive/October2024/15/c3279.html

Revenue of $3.9 billion, with organic growth of 6.5%

Net income of $385.9 million

Diluted earnings per share of $1.95; $2.03 Non-GAAP adjusted

Operating income of $600.1 million; EBITA of $622.3 million and 16.0% margin

NEW YORK, Oct. 15, 2024 /PRNewswire/ — Omnicom OMC today announced results for the quarter ended September 30, 2024.

“Omnicom delivered a strong quarter, with 6.5% organic revenue growth, and 7.9% EBITA growth. We did so while continuing to strengthen our organization by investing in talent, service capabilities, and technology platforms to enhance our client offerings,” said John Wren, Chairman and Chief Executive Officer of Omnicom. “Our cash flow improved, and we continued our very disciplined capital allocation. With exceptional new business wins and exciting new work for our clients, we expect to finish the year with strong momentum.”

Third Quarter 2024 Results

Revenue
Revenue in the third quarter of 2024 increased $304.5 million, or 8.5%, to $3,882.6 million. Worldwide revenue growth in the third quarter of 2024 compared to the third quarter of 2023 was led by an increase in organic revenue of $231.3 million, or 6.5%. Acquisition revenue, net of disposition revenue, increased revenue by $74.4 million, or 2.1%, primarily due to the Flywheel Digital acquisition in the Precision Marketing discipline during the first quarter of 2024. The impact of foreign currency translation was neutral.

Organic growth by discipline in the third quarter of 2024 compared to the third quarter of 2023 was as follows: 9.4% for Advertising & Media, 35.3% for Experiential, 4.3% for Public Relations, 0.8% for Precision Marketing, and 0.3% for Execution & Support, partially offset by declines of 1.1% for Healthcare, and 5.4% for Branding & Retail Commerce.

Organic growth by region in the third quarter of 2024 compared to the third quarter of 2023 was as follows: 6.5% for the United States, 10.9% for Asia Pacific, 6.8% for Euro Markets & Other Europe, 24.8% for the Middle East & Africa, 8.7% for Latin America, and 1.5% for Other North America, partially offset by a decline of 0.2% for the United Kingdom.

Expenses
Operating expenses increased $265.2 million, or 8.8%, to $3,282.5 million in the third quarter of 2024 compared to the third quarter of 2023.

Salary and service costs increased $209.5 million, or 8.1%, to $2,796.0 million. These costs tend to fluctuate with changes in revenue and are comprised of salary and related costs, which include employee compensation and benefits costs, freelance labor, third-party service costs, and third-party incidental costs. Salary and related costs increased $90.2 million, or 5.1%, to $1,846.9 million, primarily due to our acquisition of Flywheel Digital. Third-party service costs include third-party supplier costs when we act as principal in providing services to our clients. Third-party incidental costs that are required to be included in revenue primarily consist of client-related travel and incidental out-of-pocket costs, which are billed back to the client directly at our cost. Third-party service costs increased $105.7 million, or 15.6%, to $784.5 million, primarily as a result of organic growth in our Advertising & Media and Experiential disciplines. Third-party incidental costs increased $13.6 million, or 9.0%, to $164.6 million.

Occupancy and other costs, which are less directly linked to changes in revenue than salary and service costs, increased $37.0 million, or 12.8%, to $325.6 million. The increase is primarily related to our acquisition activity during the year. Increased office and other related costs were partially offset by lower rent expense.

SG&A expenses increased $9.7 million, or 10.8%, to $99.5 million, primarily due to professional fees related to strategic initiatives.

Operating Income
Operating income increased $39.3 million, or 7.0%, to $600.1 million in the third quarter of 2024 compared to the third quarter of 2023, and the related margin decreased to 15.5% from 15.7%.

Interest Expense, net
Net interest expense in the third quarter of 2024 increased $2.1 million to $40.4 million compared to the third quarter of 2023. Interest expense increased $12.9 million to $66.4 million, primarily due to higher outstanding debt, and interest income increased, primarily due to higher cash balances. In August 2024, we issued $600 million aggregate principal amount of 5.3% Senior Notes due 2034. Net proceeds from the offering, along with available cash, will be used to fund the $750 million repayment of our 3.65% Senior Notes due November 1, 2024.

Income Taxes
Our effective tax rate for the three months ended September 30, 2024 increased period-over-period to 26.8% from 26.0%.

Net Income – Omnicom Group Inc. and Diluted Net Income per Share
Net income – Omnicom Group Inc. for the third quarter of 2024 increased $14.0 million, or 3.8%, to $385.9 million compared to the third quarter of 2023. Diluted shares outstanding for the third quarter of 2024 decreased 0.9% to 198.2 million from 199.9 million as a result of net share repurchases. Diluted net income per share of $1.95 increased $0.09, or 4.8%, from $1.86.  Non-GAAP Adjusted Net Income per Share – Diluted for the third quarter of 2024 increased $0.11, or 5.7%, to $2.03 from $1.92. Non-GAAP Adjusted Net Income per Share – Diluted excluded $16.4 million and $11.6 million of after-tax amortization of acquired and internally developed strategic platform assets in the third quarters of 2024 and 2023, respectively. We present Non-GAAP Adjusted Net Income per Share – Diluted to allow for comparability with the prior year period.

EBITA
EBITA and Adjusted EBITA increased $45.8 million, or 7.9%, to $622.3 million in the third quarter of 2024 compared to the third quarter of 2023, and the related margin decreased to 16.0% from 16.1%. EBITA and Adjusted EBITA excluded amortization of acquired and internally developed strategic platform assets of $22.2 million and $15.7 million in the third quarters of 2024 and 2023, respectively.

Risks and Uncertainties
Current global economic disruptions, including geopolitical events, international hostilities, acts of terrorism, public health crises, high and sustained inflation in countries that comprise our major markets, high interest rates, and labor and supply chain issues could cause economic uncertainty and volatility. The impact of these issues on our business will vary by geographic market and discipline. We monitor economic conditions closely, as well as client revenue levels and other factors. In response to reductions in revenue, we can take actions to align our cost structure with changes in client demand and manage our working capital. However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions, reductions in client revenue, changes in client creditworthiness, and other developments.

Definitions – Components of Revenue Change
We use certain terms in describing the components of the change in revenue above. 

Foreign exchange rate impact: calculated by translating the current period’s local currency revenue using the prior period average exchange rates to derive current period constant currency revenue. The foreign exchange rate impact is the difference between the current period revenue in U.S. Dollars and the current period constant currency revenue.

Acquisition revenue, net of disposition revenue: Acquisition revenue is calculated as if the acquisition occurred twelve months prior to the acquisition date by aggregating the comparable prior period revenue of acquisitions through the acquisition date. As a result, acquisition revenue excludes the positive or negative difference between our current period revenue subsequent to the acquisition date, and the comparable prior period revenue and the positive or negative growth after the acquisition date is attributed to organic growth. Disposition revenue is calculated as if the disposition occurred twelve months prior to the disposition date by aggregating the comparable prior period revenue of disposals through such date. The acquisition revenue and disposition revenue amounts are netted in the description above.

Organic growth: calculated by subtracting the foreign exchange rate impact component and the acquisition revenue, net of disposition revenue component from total revenue growth.

Conference Call
Omnicom will host a conference call to review its financial results on Tuesday, October 15, 2024, starting at 4:30 p.m. Eastern Time.  A live webcast of the call, along with the related slide presentation, will be available at Omnicom’s investor relations website, investor.omnicomgroup.com, and a webcast replay will be made available after the call concludes.

Corporate Responsibility
At Omnicom, we are committed to promoting responsible practices and making positive contributions to society around the globe. Please explore our website (omnicomgroup.com/corporate-responsibility) for highlights of our progress across the areas on which we focus: Empower People, Protect Our Planet, Lead Responsibly.

About Omnicom
Omnicom OMC is a leading provider of data-inspired, creative marketing and sales solutions. Omnicom’s iconic agency brands are home to the industry’s most innovative communications specialists who are focused on driving intelligent business outcomes for their clients. The company offers a wide range of services in advertising, strategic media planning and buying, precision marketing, retail and digital commerce, branding, experiential, public relations, healthcare marketing and other specialty marketing services to over 5,000 clients in more than 70 countries. For more information, visit www.omnicomgroup.com.

Non-GAAP Financial Measures
We present financial measures determined in accordance with generally accepted accounting principles in the United States (“GAAP”) and adjustments to the GAAP presentation (“Non-GAAP”), which we believe are meaningful for understanding our performance. We believe these measures are useful in evaluating the impact of certain items on operating performance and allows for comparability between reporting periods. EBITA is defined as earnings before interest, taxes, and amortization of acquired intangible assets and internally developed strategic platform assets, and EBITA margin is defined as EBITA divided by revenue. We use EBITA and EBITA margin as additional operating performance measures, which exclude the non-cash amortization expense of acquired intangible assets and internally developed strategic platform assets. We also use Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITA, Adjusted EBITA Margin, Adjusted Income Tax Expense, Adjusted Net Income – Omnicom Group Inc. and Adjusted Net Income per share – Omnicom Group Inc. – Diluted as additional operating performance measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in accordance with GAAP. Non-GAAP financial measures as reported by us may not be comparable to similarly titled amounts reported by other companies.

Forward-Looking Statements
Certain statements in this document contain forward-looking statements, including statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, from time to time, the Company or its representatives have made, or may make, forward-looking statements, orally or in writing. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial position, or otherwise, based on current beliefs of the Company’s management as well as assumptions made by, and information currently available to, the Company’s management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “should,” “would,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or similar words, phrases or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include: adverse economic conditions, including those caused by geopolitical events, international hostilities, acts of terrorism, public health crises, high and sustained inflation in countries that comprise our major markets, high interest rates, and labor and supply chain issues affecting the distribution of our clients’ products; international, national, or local economic conditions that could adversely affect the Company or its clients; losses on media purchases and production costs incurred on behalf of clients; reductions in client spending, a slowdown in client payments, and a deterioration or disruption in the credit markets; the ability to attract new clients and retain existing clients in the manner anticipated; changes in client advertising, marketing, and corporate communications requirements; failure to manage potential conflicts of interest between or among clients; unanticipated changes related to competitive factors in the advertising, marketing, and corporate communications industries; unanticipated changes to, or the ability to hire and retain key personnel; currency exchange rate fluctuations; reliance on information technology systems and risks related to cybersecurity incidents; effective management of the risks, challenges and efficiencies presented by utilizing Artificial Intelligence (AI) technologies and related partnerships in our business; changes in legislation or governmental regulations affecting the Company or its clients; risks associated with assumptions the Company makes in connection with its acquisitions, critical accounting estimates and legal proceedings; the Company’s international operations, which are subject to the risks of currency repatriation restrictions, social or political conditions, and an evolving regulatory environment in high-growth markets and developing countries; and risks related to our environmental, social, and governance goals and initiatives, including impacts from regulators and other stakeholders, and the impact of factors outside of our control on such goals and initiatives. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that may affect the Company’s business, including those described in Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 and in other documents filed from time to time with the Securities and Exchange Commission. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements.

View original content:https://www.prnewswire.com/news-releases/omnicom-reports-third-quarter-2024-results-302276965.html

SOURCE Omnicom Group Inc.

Nvidia (NVDA) and Palantir (PLTR) have been two of 2024’s hottest stocks — Nvidia’s 179.6% year-to-date gain has made it the second-most valuable company in the world by market cap, while Palantir’s 153.3% gain has put it on the map as a mega-cap tech stock to be reckoned with, not to mention a new member of the S&P 500 (SPX).

Both stocks have benefitted from being key players in the AI revolution. Both companies have exciting futures ahead of them, but there is a key difference between the two that makes one the more compelling opportunity at this point in time. Which looks like the better choice for investors right now?

Massive Gap in Valuation on a Price-to-Earnings Basis

Nvidia’s 2024 surge has taken it to a relatively high valuation multiple of 47.5 times January 2025 earnings estimates. The S&P 500 trades at 24.7 times earnings, meaning that Nvidia is nearly twice as expensive as the broader market.

However, with consensus earnings per share projected to grow to $4.01 per share for the fiscal year ending in January 2026, Nvidia looks quite a bit more palatable at 33.6 times forward earnings. While this is still fairly expensive, it’s starting to look reasonable enough for a mega-cap powerhouse projected to grow earnings per share by over 40% for the year. While Nvidia sometimes catches flack from value-oriented investors for its above-average price-to-earnings multiple, Palantir is even more expensive.

The massive 153% YTD gain has pushed shares of Palantir to an incredible valuation of 122.4 times December 2024 earnings estimates. This is more than double Nvidia’s valuation and roughly five times the broader market. With the stock expected to grow earnings per share by 19.4% to $0.43 per share for December 2025, the stock’s valuation comes down a bit but is still trading at an exorbitant triple-digit multiple of 100.8 times forward earnings.

Looking Beyond Price-to-Earnings

Plus, it’s not just price-to-earnings that makes Palantir look significantly more expensive than Nvidia. When looking at the two stocks on a price-to-sales basis, a popular metric often used for evaluating high-growth names like technology stocks and software stocks, Palantir trades at an astronomical price-to-sales ratio of 35.3, while Nvidia trades for a high but comparatively cheaper 26.3 times sales.

What About the PEG Ratio?

Lastly, it’s worth comparing the two stocks based on their PEG ratios (price-to-earnings-to-growth ratio), a popular valuation metric useful for evaluating growth stocks like Nvidia and Palantir by accounting for earnings growth. PEG ratio is calculated by taking a stock’s price-to-earnings ratio and dividing it by its earnings growth rate. The lower the PEG ratio, the better a stock looks by this measure. Investors and analysts who utilize this metric typically view a PEG ratio of 1.0x or less to be undervalued.

So, how do Nvidia and Palantir stack up on this basis? Nvidia’s PEG ratio of 1.8 is a bit higher than ideal but not prohibitive. On the other hand, Palantir trades at a significantly higher PEG ratio of 10.4, indicating that it is likely overvalued even when accounting for its earnings growth.

Palantir is no doubt an exciting company, but it’s hard to sustain a valuation multiple like this, and it leaves little room for error — if the company falls short of analyst expectations or hits any speed bumps, shares could tumble quickly.

Is NVDA Stock a Buy, According to Analysts?

Turning to Wall Street, NVDA earns a Strong Buy consensus rating based on 39 Buys, three Holds, and zero Sells assigned in the past three months. The average NVDA stock price target of $152.86 implies 10.7% upside potential from current levels.

See more NVDA analyst ratings

Is PLTR Stock a Buy, According to Analysts?

Turning to Wall Street, PLTR earns a Hold consensus rating based on four Buys, six Holds, and six Sell ratings assigned in the past three months. The average PLTR stock price target of $27.67 implies 36.2% downside potential from current levels.

See more PLTR analyst ratings

Smarten Up

Wall Street analysts are far more constructive on Nvidia, and so is TipRanks’ proprietary Smart Score system. The Smart Score is a quantitative stock scoring system created by TipRanks. It gives stocks a score from one to 10, based on eight key market factors. Scores of eight, nine, or 10 are considered equivalent to an Outperform rating. Scores of four, five, six, or seven are considered Neutral, and scores of three or below are considered equivalent to an Underperform rating.

Nvidia boasts an Outperform-equivalent Smart Score of 9.

Meanwhile, Palantir receives a far less favorable Neutral Smart Score of 4.

Nvidia Is the Clear Choice

NVDA and PLTR are both high-flying AI stocks, and both are projected to grow earnings significantly in the year ahead. However, Nvidia is projected to grow earnings more than twice as much as Palantir. Despite this, Nvidia shares trade for a far cheaper valuation multiple. Nvidia is often criticized as an ‘expensive’ stock, but its forward earnings multiple is just a third of Palantir’s double-digit valuation, making it look downright cheap in comparison.

Plus, sell-side analysts rate Nvidia a Strong Buy and see an upside of 10.7% over the next 12 months, while they are considerably more cautious towards Palantir, rating it a Hold and forecasting a potential downside of 36.4% from current levels. This disparity in analyst views is another strong point in favor of Nvidia.

I’m bullish on Nvidia based on its significantly cheaper valuation and superior earnings growth, making it the clear-cut winner in this comparison of high-profile AI stocks. For investors looking to capitalize on the generative AI wave, Nvidia continues to look like a smart choice.

Disclosure