AI Takes Off: Vanguard Bets Big !
On 12 Sep 2024, I have a “picked” post on $Palantir Technologies Inc.(PLTR)$ vs $C3.ai, Inc.(AI)$.
Did you manage to come across it ? (click here ! to refresh memory, if needed!)
Its been a month since, when I come across another post on Palantir. (see below)
The Purchase.
On 30 Sep 2024, Vanguard Group Inc made a significant addition to its portfolio.
It has bought 42,466,906 Palantir shares and increased it's total holdings in Palantir to 244,058,850 shares.
The trade was executed at $37.20 per share, reflecting a strategic enhancement in Vanguard's portfolio with a modest impact of 0.03%.
The Effect.
The recent purchase represents only a 0.17% of Vanguard’s total investments.
It fits with the mutual funds company’s strategy to invest in high growth technology companies.
With its latest purchase, Vanguard now owns 11.39% of PLTR, positioning itself as a significant investor, reflecting the company’s confidence in PLTR’s future growth & operational strategy.
Who is Vanguard Group Inc ?
It was founded in 1975 by John C. Bogle,
Overtime, it has has grown into a global leader in (a) low-cost mutual funds and (b) ETFs, emphasizing a client-owned structure that benefits its investors.
Its investment philosophy focuses on (i) long-term success and (ii) cost efficiency.
This is evident in its strategy of (1) offering index mutual funds and (2) reducing operating expenses.
The firm's significant growth has been supported by international expansion and a broad range of product offerings tailored to diverse investor needs.
Palantir's Performance & Valuation.
On 7 Oct 2024, Palantir closed at $39.89. (see above)
Based on Gurufocus’s assessment, it is overvalued, a fair value “should be” $17.88.
Ignoring Gurufocus evaluation, PLTR has an impressive run with:
YTD increase of +134.56% gain (as of 07 Oct 2024).
An overall gain of +322.72% since its IPO on 30 Sep 2020.
The impressive performance highlights US market's strong confidence in Palantir's growth trajectory and technological offerings in 2 flavours - Foundry & Gotham, to serve its diverse client base.
Financial Health.
Based on Gurufocus proprietary evaluation: (see above)
Its financial health is robust, with a Financial Strength rank of 10/10.
Its Profitability rank stands at 3/10 - indicating areas for improvement.
PLTR’s growth and its Growth rank are also areas of focus, with a score of 6/10.
Despite these challenges, Palantir's market valuation metrics and its strategic positioning in the technology sector suggest potential for future growth.
Afterthoughts.
After reading, I thought Palantir has an edge over C3.ai when it comes to AI application.
That was until I came across another post on AI, a day later. (see below)
You must be kidding me.
This AI post is also from Gurufocus with the Buyer (surprise, surprise) Vanguard Group Inc, coincidentally. Even the writing style is in similar sequence.
Let’s jump in too, shall we.
The Purchase.
On 30 Sep 2024, Vanguard Group Inc made a significant addition to its portfolio.
It has bought 965,738 C3.ai shares and increased its total holdings in C3.ai to 12,489,440 shares.
The trade was executed at $24.23 per share, reflecting a strategic enhancement in Vanguard's portfolio in AI sector.
The Effect.
With its latest purchase, Vanguard now owns 10.11% of C3.ai.
This small change fits Vanguard's long-term plan to invest in technology - reflecting a minor yet strategic enhancement to its portfolio, especially in AI technology.
C3.ai Performance & Valuation.
On 8 Oct 2024, C3.ai closed at $24.45. (see above)
Based on Gurufocus’s assessment, it is undervalued, a fair value “should be” $27.67.
Ignoring Gurufocus evaluation, C3.ai has a muddle run with:
YTD decline of -14.93% loss (as of 08 Oct 2024).
An overall loss of -79.55% since its IPO on 09 Dec 2020, 3 months after PLTR.
Its poor showings could be attributed to its change in business model:
C3.ai started with selling software licenses that did not gain accelerating traction.
In late 2022, it pivoted from selling software licenses to a Software-as-a-Service (SaaS) model.
Financial Health.
Based on Gurufocus proprietary evaluation: (see above)
Its financial health is robust (like PLTR), with a Financial Strength rank of 10/10.
Its Profitability rank of 3/10. This implies it has had trouble to make a profit.
Lastly, its Growth rank of 8/10, outranking PLTR.
Afterthoughts.
Having gone through both Vanguard posts,
PLTR purchase was bigger than C3.ai.
Vanguard remains a “bigger” major shareholder of PLTR, followed by C3.ai.
More importantly, it shows Vanguard’s strong conviction of Artificial Intelligence (AI) penetration from immediate to medium term.
Vanguard Group Inc - Top 10.
Both posts have the same Top 10 holdings of the mutual funds house. (see above)
Did you notice that 6 of 7 “Magnificent Seven” stocks are found here, except $Tesla Motors(TSLA)$ ?
Alphabet collectively ( $Alphabet(GOOG)$ & $Alphabet(GOOGL)$ ) at $167.9 billion ranks #4 in listing.
Another lesson learnt from the pro - Vanguard, that is invest in blue chips stocks only (if we can help it).
As a small investor with limited resources, I would buy just one AI stock instead of two or more, like Vanguard does. “Safe” to say, it will be PLTR.
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AI still in uptrend!