Chipmaker Nvidia was all the rage in 2024, as the little known company went on to become one of the most valuable companies in the world, often taking the top spot.
Nvidia’s share price soared more than 185% YTD , and was seen hovering around $137 on Tuesday.
However, despite the stellar show, Nvidia is only third in the S&P 500’s list of top performing stocks of 2024.
Palantir Technologies that specialises in software platforms for big data analytics, has seen a whopping 365% rise YTD, followed by Vistra Corp, that has risen by more than 267% this year.
Here’s what analysts have to say about each of these stocks heading into 2025:
Palantir:
Palantir has gained from the hype around generative artificial intelligence as it was one of the early adopters of what we now know as AI.
The company specializes in data analytics, processing vast amounts of information to uncover actionable insights and trends.
This technology served as a foundation for the development of large language models (LLMs) that power platforms like ChatGPT.
Among analysts polled by FactSet, Wedbush’s Dan Ives has consistently expressed confidence in the company’s ability to capitalise on the AI boom.
He recently raised his target price to $75. The price of Palantir stood at $77.18 on Tuesday.
Ives sees the company as well-positioned to replicate the success of software and cloud-computing giant Oracle in the AI era.
On the the other hand, RBC Capital Markets’ Rishi Jaluria has a starkly lower target price of $11 for Palantir.
His valuation is based on an enterprise value-to-revenue multiple of seven times his forecast for the company’s 2025 revenue, a sharp contrast to its current multiple of 33 times.
Jaluria views Palantir’s risk-reward profile as “skewing unfavorable.”
In his latest research note, he pointed out that the company’s recent earnings strength was heavily driven by government contracts, influenced by the timing of specific deals, while growth in its commercial segment has slowed.
Vistra Corp.
Vistra Corp, the integrated retail electricity and power generation company based in Irving, Texas.
Vistra has capitalized on the surging electricity demand driven by AI data centers and cryptocurrency mining—an industry now consuming more energy than some entire nations.
This demand is expected to persist and intensify with the ongoing transition to electric vehicles (EVs).
While EV demand has proven less predictable than anticipated, the overall outlook for energy demand remains exceptionally strong, driving investors to the stock.
Shares of the Texas based company have more than tripled in the trailing 12 months but is still cheaper than Constellation Energy at writing.
Shahriar Pourreza is convinced that the company’s nuclear as well as gas assets are attractive to AI companies.
I like Vistra because I don’t have to bet whether the next deal is going to be a nuclear plant or it’s going to be a gas plant.
He went on to call Vistra stock his top pick for 2025 in his report.
Pourreza’s $177 price target indicates potential for another 26% upside in VST from current levels.
On the other hand Max Greve of Seeking Alpha believes over time, more consumers will move away form grid energy towards standalone-solar-storage.
“I recognize that is a controversial view which many have taken exception to. But I still think we are more likely to see a grid-demand shift – higher from business, lower from consumers – than a massive grid-demand expansion,” he writes.
This is why, he says, he has avoided not only Vistra but pretty much all electric grid stocks such as ConEd, Dominion, and NRG Energy.
Obviously, that hasn’t served me well this year in the case of Vistra. And between the AI demand the potential EV expansions I certainly don’t recommend a short. But I am staying away from Vistra, despite its admitted short-term potential.
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