Contest Matchup #3: The Trade Desk vs Palantir - 7investing 7investing
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Contest Matchup #3: The Trade Desk vs Palantir

Two smart companies who are embracing AI to become even smarter. Which will be the wiser investment for 2024?

March 12, 2024

Two smart companies who are embracing AI to become even smarter. Which will be the wiser investment for 2024?

Welcome to our 2024 Stockpicking competition! We are on a quest to find the best stock opportunities of the year for investors. Enter for free, with a chance to win a $1,000 Amazon gift card and a a free year of 7investing!

To complement our contest, we’ll be publishing seven head-to-head matchups between stocks; and we’ll include the winners in our own 7investing Team entry. At the bottom of each article is our voting poll, where you can help us determine which of these two companies will be the better-performer over the upcoming three-year period.

To following along with the event and to have all matchups sent directly to your Inbox, join our free email list:

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Our 3rd Matchup: The Trade Desk vs Palantir Technologies

Our third head-to-head matchup is two companies who are embracing artificial intelligence to make their platforms even better, between The Trade Desk (Nasdaq: TTD) and Palantir Technologies (NYSE: PLTR).

The Trade Desk’s demand-side advertising platform allows large ad agencies to programmatically place image, audio, and video advertisements into websites, podcasts, and connected TV shows. It is the lead husky in the crowded and highly-competitive digital ad industry, where the pace of innovation and offering an excellent return on investment are paramount.

Palantir was one of America’s largest private companies for years, offering its operational intelligence platform to the US Department of Defense to gather and analyze crucial military intel. Now publicly-traded, the company has opened up its cutting-edge software to the business world; which is eager to use it and is significantly boosting Palantir’s commercial sales growth.

Do you think the programmatic ad leader or the operational intel provider is the better stock to invest in during 2024?

Cast your vote in our poll below! We provide commentary on each of these companies, and we’ll include the one that receives more votes in our 7investing Stockpicking contest portfolio!

The Trade Desk

2023 Total Return: 60%

2024 YTD Return (as of 3/12/24): 13%

Two decades ago, Netflix (Nasdaq: NFLX) changed the media world. By offering content “on demand.” through a monthly streaming subscription, TV and movies could be accessed on the viewer’s schedule, without leaving the house or waiting for their scheduled broadcast. Other media companies soon followed Netflix’s lead, mass-digitizing the world’s media content into their own streaming plans.

But those shows and movies got expensive, and consumers only had a few hours each day to commit to the silver screen of their living room. This led media companies to begin embedding advertisements into their streaming plans, to subsidize the costs and to keep the pricing attractive.

The Trade Desk has led this digital advertising transition. Its demand side platform allows ad agencies to place the right ad in front of the right person at the right time, with its Universal ID 2 identifier serving as a refreshing alternative to the web’s traditional walled gardens of Facebook and Alphabet.

The Trade Desk recently reported 23% revenue growth and a 47% EBITDA margin, proving that it is the best-in-class when it comes to using its AI engine to optimize the designed outcome of ad campaigns and the efficiency of their overall spend. Its recent introduction of OpenPath for Connected TV could be a game-changer for the entire industry.

Palantir Technologies

2023 Total Return: 167%

2024 YTD Return (as of 3/12/24): 47%

Named for the all-seeing crystal ball of the Lord of the Rings franchise, Palantir’s operational intelligence platform helps complex organizations draw actionable insights from a flood of data.

The company’s first customer was the US government, who used its Gotham platform to “integrate disparate datasets, map them onto a common ontology, and then layer analytical tools on top.” The U.S. Army’s embraced Palantir as a way to improve its own battlefield intelligence system, which throttled sales and solidified Palantir’s credibility. The government more recently deployed Gotham into its military support for Ukraine and with a new deal for its national Nuclear Security Administration.

The government contracts also sparked a ton of interest from commercial enterprises, who were similarly eager in using Palantir’s Artificial Intelligence Platform to make their businesses more efficient. Palantir’s stock has been skyrocketing in February, largely based upon the 70% year-over-year growth of its US commercial revenue in the fourth quarter (up from only 33% growth in the previous quarter).

The commercial world is recognizing the potential for large language models like OpenAI’s GPT. But they still need help from providers like Palantir to get them set up and then fine-tuned using their own company-specific data.

That means there’s plenty more business to come for Palantir’s omniscient platform. The company reported a 33% free cash flow margin in 2023 and is predicting for 40% US commercial revenue growth in 2024.

Cast Your Vote!

Will The Trade Desk or Palantir be the better investment for our 7investing portfolio on Stock Card to own? Cast your vote in our live poll below!

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