Author: mo-admin

Hot Stocks Under $10 

Diversification is an important part of any sound investment strategy. 

In fact, it’s critical that a portfolio be well-balanced to help minimize risk and maximize opportunity.  After all, you never want to put all your eggs in one basket. Plus, not only can diversification reduce your exposure to a single egg, stock, or industry, it can help reduce volatility, and reduce your risk of a potentially bad outcome. 

One way to do that is by investing in stocks in several different industries, such as artificial intelligence and technology, the green energy boom, electric vehicles, oil and gas, healthcare, and even biotech. Another way is to invest in different categories of stocks, including large cap stocks, dividend stocks, growth stocks, small cap stocks and value stocks. 

It’s also a good idea to have a few lower-priced stocks in the mix, too. 

Granted, some lower-priced stocks aren’t worth the hassle. Many will fail to live up to investor expectations.  However, there are also hidden gems with long-term potential.  Remember, even Apple, Microsoft, and Advanced Micro Devices were once low-priced stocks.

Here are three more we believe have solid potential, as well.

Hot Stocks Under $10: Editas Medicine (EDIT)

Look at gene editing stocks, like Editas Medicine (EDIT), for example.

By “editing genes,” we have the ability to alter, remove, and even add a DNA sequence to help treat countless disorders we never thought treatable. 

Right now, there are about 7,000 diseases caused by genetic disorders, which occur when a mutation affects your genes, or when you have the wrong amount of genetic material, as noted by the Cleveland Clinic. 

Plus, according to Interesting Engineering, “Thankfully, the growing world of genome editing could be the ‘spell-checker’ needed to detect and eventually fix these.” That “spell-checker” could very well help treat cardiovascular diseases, cancer, and neurogenerative issues, such as Alzheimer’s, and Parkinson’s.  It may even help with sickle cell anemia, lymphoblastic leukemia, lung cancer, multiple myeloma, Beta thalassemia, etc.  

One of the potential standouts with gene-editing is Editas Medicine (EDIT) – whose EDIT 301 is already seeing positive initial safety and efficacy data for sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT). 

With Sickle Cell Disease (SCD), for example, the company presented positive initial clinical safety and efficacy data from trials in June. It’s now on track to dose 20 SCD patients in trials by year end. With Transfusion-dependent Beta Thalassemia (TDT), the company already presented positive initial clinical safety and efficacy data from the first patient treated in June. The company is now on track to post additional clinical data by the end of this year.

Further positive data from those studies could have a substantial impact on this sub-$10 stock.

Hot Stocks Under $10: Recursion Pharmaceuticals (RXRX)

Recursion Pharmaceuticals (RXRX) is a clinical stage TechBio company that’s decoding biology to industrialize drug discovery with artificial intelligence and machine learning. 

Helping, tech powerhouse, Nvidia just invested $50 million in the company “to accelerate development of its AI foundation models for biology and chemistry, which, in collaboration with NVIDIA, it intends to optimize and distribute to biotechnology companies using NVIDIA cloud services,” as noted in a company press release.

That’s substantial news.

In addition, Recursion will use Nvidia technology to help create AI models and software to discover new drugs. Plus, it may help with the five human trials Recursion is conducting, including a mid-stage trial to treat cerebral cavernous malformations. Even better, Recursion is working on treatments for neurofibromatosis, familial adenomatous polyposis, mutant cancers, ovarian cancers and cancer immunotherapy. 

Here’s what makes AI and drug development even more exciting.

Traditional new drug development has a fail rate of 90%, according to the National Institutes of Health.  With AI and machine learning, failure rates could drop, and the design of drugs could become far easier. Plus, with these tools, we may know exactly which molecules should be used to create game-changing treatments for diseases we never thought were treatable.

In fact, according to Pfizer, “AI could assist pharma companies in getting medicines to market faster. AI today not only does flashy gene-sequencing work, it’s being trained to predict drug efficacy and side effects, and to manage the vast amounts of documents and data that support any pharmaceutical product.”

Hot Stocks Under $10: ChargePoint (CHPT)

Switching gears, keep an eye on ChargePoint (CHPT).

At less than $10 a share, the stock is inexpensive with plenty of catalysts. For one, automakers are racing to build a massive electric vehicle charging network. In fact, according to CBS News, automakers say the new charging network will nearly double the number of quick-charging plugs in Canada and the U.S. Plus, the Biden Administration wants 67% of all new auto sales to be electric by 2032, which will only increase charging station demand. 

Also, according to research firm Wood Mackenzie, “The number of electric vehicle (EV) charging ports in the U.S. is estimated to increase four times from current levels to 18M by 2027,” as noted by Seeking Alpha.

“Tesla and ChargePoint currently dominate the charging ports market, with the former claiming a 61% market share of DCFC ports in the U.S. Meanwhile, CHPT leads with a 46% market share of level 2 ports, which Wood Mackenzie defines as EV chargers with a charge rate between 3 kW and 19 kW of AC power,” they added.

We also have to consider that recent weakness may be a strong opportunity with CHPT.

Analysts at Gabelli Funds has also defended the stock following its earnings-induced pullback. The firm noted that CHPT’s Q1 was positive with revenue coming in at the higher-end of previous guidance. Plus, the company noted it expects to cut its EBITDA loss from Q1 by two-thirds by Q4 of this year. “The negative reaction to the earnings report is likely due to a lower-than-expected 2Q guide, which we think is overblown,” they added.

“Gabelli thinks that as CHPT continues its path to inflect cash flow positive in 2024 the stock will perform well. Of note, Gabelli has a $14 2024 private market value, which represents almost 50% upside from the current price,” added Seeking Alpha.

CoreWeave Valuation Jumps to $8 Billion amid AI Boom and Microsoft Partnership

CoreWeave continues to elicit strong interest amid the artificial intelligence boom. The cloud computing provider is reportedly exploring a minority stake sale in a deal that could value it as much as $8 billion. The multi-billion valuations come on the heels of reports indicating that OpenAI, another sensational AI play, is on course to become a multi-billion business generating over $1 billion in revenues annually.

CoreWeave Valuation

The Roseland, New Jersey-based startup has engaged the services of an adviser as it looks to sell about 10% of equity stakes at a valuation of between $5 billion and $8 billion. While the company previously specialized in Ethereum mining, it appears to have struck gold on leveraging Nvidia’s graphics chips to develop data centers.

CoreWeave has already started building data centers based on Nvidia chips to enable clients to take advantage of artificial intelligence-related computing as a service. As demand for AI-powered data centers grows, the company is enjoying booming business and is projected to achieve revenues of $1.5 billion next year. Nvidia’s CEO has already touted the company as one of the many that are doing extremely well in embracing AI.

The startup is familiar in the money markets, having already raised $421 million in equity this year. The high intake does not come as a surprise, given the ever-growing demand for startups with significant exposure to the game-changing technology. Nvidia is one of the companies believed to have invested in the cloud computing provider as it remains bullish about its long-term prospects.

Early this month, the startup secured $2.3 billion in debt financing from Magnetar Capital and funds managed by Blackstone Tactical Opportunities. The investment underscores how funds and investors are jostling to gain exposure to its business.

Microsoft’s Billion Dollar Opportunity

In addition, CoreWeave has emerged as an exciting AI startup on Microsoft, announcing plans to spend billions of dollars on its cloud infrastructure. CoreWeave has emerged as an ideal partner for the software giant, given that it offers simplified access to Nvidia’s graphics processing units, which are the best in running AI models.

Earlier this year, Microsoft signed a deal with CoreWeave to ensure OpenAI, which operates the viral ChatGPT, has adequate computing power. The deal came on CoreWeave reiterating that it can deliver computing power that is 80% less expensive than what is on offer in other legacy cloud providers.

CoreWeave already offers access to the less expensive Nvidia A40 GPUs that are ideal for visual computing. It also has access to A100 for its data centers, chips best known for data analytics, and high performance. Consequently, Microsoft has seen it as an ideal partner for strengthening its cloud unit, which is facing stiff competition from Google and Amazon.

Google is increasingly working with other companies as it looks to integrate as many AI tools and models into its cloud. The company has already inked deals with Meta Platform and Anthropic to have their AI tools and models in its cloud. The integration is part of the tech giant’s plan to become a go-to platform for everything AI as it looks to attract as many corporate clients as possible.

Microsoft Backed OpenAI Nearing $1B Annual Revenues on AI Uptake

Microsoft-backed OpenAI is on course to become a $1 billion artificial intelligence business empire.   Reports indicate that the startup behind the popular chatbot ChatGPT is generating revenues upwards of $80 million a month and is consequently on track to hit $1 billion in annual revenues. If true, then the startup is on the pathway to profitability as it recoups losses of about $540 million accrued last year.

OpenAI Robust Growth

The revenues that OpenAI is raking up monthly do not come as a surprise, as ChatGPt, the flagship AI chatbot, is already being used by more than 80% of Fortune 500 companies. A growing number of organizations have found ways to use the tool for coding and brainstorming, among other operations.

OpenAI has grown to become one of the most sought-after startups, owing to its innovation powered by revolutionary artificial intelligence technology. ChatGPT, which is the most popular solution out of the startup, is a small piece of the puzzle. The startup has come up with AI-powered solutions for creating content from videos to poetry.

In recent months, the startup has inked strategic partnerships with major corporations to incorporate its technology into their businesses and products. An investment of about $10 billion from Microsoft has propelled OpenAI to become a one-stop shop for AI solutions and innovations, spearheading growth in the burgeoning segment.

ChatGPT remains OpenAI’s biggest AI invention as it continues to send shockwaves in various sectors. Early in the year, Microsoft rattled the tech industry after confirming plans to integrate the chatbot on its search engine Bing in the race to counter Google’s monopoly on the multibillion-dollar industry. The integration push forced Google to unveil Bard, an AI-powered chatbot, as it also seeks to safeguard its edge in the segment.

Targeting Corporate Clients

Fast forward, OpenAI has unveiled a corporate version of its chatbot ChatGPT as it aims to target more corporate clients. The corporate version has added features and privacy safeguards that should allow OpenAI to attract a broad mix of businesses and customers, strengthening its revenue base even further.

The new tool comes with unlimited use of OpenAI’s most powerful generative AI model, GPT 4, and data encryption. Users can type in a prompt and receive a written response from ChatGPT enterprise within seconds. The startup worked with more than 20 companies to test the ChatGPT enterprise.

The corporate version should allow OpenAI to make more money amid the increased adoption of AI solutions and Innovation in the corporate and mainstream sections. The company is already making impressive strides along these lines amid a premium subscription and service launch. It has also started offering companies paid access to its application and programming interface.

Alphabet is another company that is betting big on artificial intelligence as it looks to counter the threat posed by Microsoft on search and cloud computing. Through its tech unit, Google, the tech giant has resorted to partnering and working with other companies as it looks to strengthen its competitive edge around emerging technology. Consequently, it has started adding AI tools and models from other companies, including Meta Platforms and Anthropic, to its cloud unit.

Lithium Stocks Explode As Race to Secure Key Supplies for Batteries Heats Up

Lithium has emerged as one of the hottest metals, in high demand, amid the electric vehicle revolution. Likewise, stocks with exposure to the metal have been some of the most volatile, generating significant returns and losses amid increased focus on the segment.

Lithium Miners in Focus

Liontown Resources Ltd has been one of the biggest beneficiaries of the craze, surging by more than 100% year to date. On the other hand, Lake Resources has imploded, tanking by more than 70% after experiencing delays and cost blowouts on its key project in Argentina.

Similarly, investors who bought stakes in lithium stocks have registered significant gains year to date, while others have been on the receiving end amid the heightened volatility in the industry. The extreme volatility has to do with the fact that small and mid-sized firms mainly dominate the segment in the early stages of exploring and developing lithium mines across Australia and other parts of the world.

Companies that have struck large deposits of the precious commodity have been the most volatile, exploding in value. Azure Minerals is among the emerging stars in the segment, having discovered large deposits, consequently exploding by more than 1,100%. The company’s sentiments have improved significantly after rejecting a takeover push by a Chilean Lithium producer, which is also developing one of the largest lithium deposits in Canada.

Pilbara Minerals Ltd is another company that has seen its fortunes improve significantly after transforming from a $500 million junior miner three years ago to a $15 billion miner. The company produces 8% of the world’s total lithium supply. Its stock has risen by over 30% in 2023.

South Korea Hydro Lithium has also exploded by more than 1500% over the past year after changing its name from Korea Se Corp and transitioning into an EV battery-related business.

Auto Companies Lithium Investments

The heightened volatility has to do with highly prospective lithium miners increasingly attracting bids and investments from some of the biggest companies. Demand for lithium is expected to increase as the race to get rid of fossil fuel cars around the globe heats up. Automakers are under immense regulatory pressure to play a pivotal role in curbing carbon emissions. Consequently, most are investing in electric vehicles and looking for ways to secure key lithium supplies.

Tesla is one of the companies increasingly investing in Lithium miners as it looks to secure critical supplies of the crucial metal. The EV giant is reportedly considering acquiring Brazil-based lithium miner Sigma Lithium, valued at about $3 billion.

The automaker is also in the process of investing $375 million to build a new lithium refinery in Corpus Christi as it looks to secure a domestic supply of lithium hydroxide in Canada. The investment is part of the automaker’s push to venture into the mining world to counter the rising costs of key minerals for battery production.

General Motors is another company that has been driving valuations in the Lithium sector after announcing plans to invest $650 million in Lithium Americas. The investment will go towards developing a mine in Nevada, thus allowing the company to secure key supplies needed to produce electric batteries.

Nevertheless, investors are becoming increasingly cautious when it comes to investing in Lithium miners. Most investors and traders want to see clear evidence that a company has discovered massive Lithium deposits that can be turned into a productive mine before investing.

Palo Alto Networks Explodes On Stellar Q4 Results

Palo Alto Networks is yet again the darling of Wall Street after coming under immense pressure on spooking the markets by scheduling its earnings release date for after the bell. The slot is normally reserved for companies likely to deliver disappointing results. The sell-off came amid growing concerns that the cyber security firm was on course to deliver disappointing earnings results.

Palo Alto networks Results

The overreaction underscores the extreme market volatility on stocks with exposure to the artificial intelligence train trend. In addition, Palo Alto became the first S&P 500 constituent to schedule results on a Friday afternoon since December 2020. Since announcing on August 2, the stock fell by nearly 19%, wiping out $15 billion in market cap, far deeper than the 8% loss of the Nasdaq 100 over the same period.

Fast forward, Palo Alto Networks has recouped all the losses after delivering better-than-expected fiscal fourth-quarter results. The security software company delivered a 26% year-over-year increase in revenue to $2 billion, beating consensus estimates of $1.958 billion. Billings in the quarter were up 18%  to $3.16 billion as Non-GAAP profits came in at $1.44 a share against the $1.29 a share that analysts expected.

For the full year, Palo Alto Network delivered revenue of $6.9 billion, up 25% year over year, with adjusted profits of $4.44 a share. Full-year billings were up 23% to $9.2 billion. For the July 2024 fiscal year, the software security company expects revenue of between $8.15 billion and $8.20 billion. Earnings are expected to range between $5.27 and $5.40 per share against the street estimates of $4.98. Billings are expected to grow between 19% and 20% to between $10.9 billion and $11 billion.

Following the stellar fiscal fourth-quarter results, analysts’ sentiments toward the artificial intelligence-exposed stock have improved significantly. The average price target on the stock is $257 a share, implying 20% plus upside potential. Wedbush analyst Daniel Ives remains one of the most bullish analysts, with a $290 price target on the stock.

Palo Alto Networks Price Target

Deutsche Bank analyst Brad Zalnick has reiterated a Buy rating on the stock with a $225 to $270 price target. According to the analyst, Palo Alto Networks continues to outperform without the need for unusual theatrics such as management change, the need for merger and acquisition, and strategic pivots.

According to Bank of America, analyst Tal Liani increased focus on profitability and better cost controls continue to drive earnings growth depicted by the 16% beat in the fourth quarter. Consequently, the investment bank has increased its price target from $270 to $290.

Even as Palo Alto network stock rallied by 14% Monday morning, all eyes and ears are on Federal Reserve Officials expected to make crucial comments the week ahead. Jerome Powel, the US Federal reserve President is poised to make key remarks at the central bank’s annual Jackson Hole symposium on Friday.

Powell’s remarks will be scrutinized as they come after FED minutes last week indicated the central bank may be contemplating further rate hikes to help push inflation lower. Many investors had hoped the FED would go slow on rate hikes after the July meeting, but that does not appear to be the case.

General Motors Invests in Mitra Chem in Push for LFP Batteries for Affordable EVs

The race to produce affordable electric vehicles to rival market leaders is heating up. Not wanting to be left behind, General Motors has participated in a $60 million funding round on a startup working on a new version of electric batteries. Mitra Chem is a California-based startup that is working on a new set of batteries based on lithium iron and phosphate (LFP) that are proving to be cheaper than conventional lithium-ion batteries.

LFP Batteries

LFP batteries are becoming increasingly popular as they do not require expensive cobalt and nickel minerals. Therefore, they tend to cost much less, which could allow General Motors and other automakers to develop affordable electric vehicles. Tesla, Rivian and Ford are some of the automakers using the new battery set on their affordable electric vehicles.

General Motors investing in Mitra Chem should give the company exclusive access to the much more affordable batteries that should allow it to develop affordable EVs for the mass market. In addition, it would be in a solid position to take on Tesla, which continues to dominate the segment with an array of EVs for every market niche.

Nevertheless, LFP batteries have one big disadvantage. Their lower power density compared to other batteries means they come with a limited range on a single charge. In this case, automakers will have to implant many LFP battery cells in cars to match the range of Lithium-ion batteries. The downside to adding more cells is that it increases the vehicle’s weight.

Another major challenge associated with LFP batteries is that Chinese companies currently make them. Given the tussle between Beijing and Washington over various technologies deemed as a matter of national security, automakers could struggle to secure the much-needed supplies to produce affordable electric vehicles in masses.

Securing Battery Supplies

Nevertheless, General Motors is banking on the fact that Mitra Chem is working on a new variation of LFP batteries that adds manganese to the battery’s cathodes to increase the battery’s power density. The addition does not in any way affect the cost advantage that the batteries have been associated with

Consequently, General Motors’ vice president, charged with speeding up electric vehicle rollout, believes Mitra Chem could have the key to helping the company achieve its targets. Likewise, the automaker is increasingly stepping up its focus on potential breakthroughs that could allow it to ramp up production.

The investment in Mitra Chem comes on the heels of General Motors investing $650 million in Lithium Americas as part of an effort to develop a mine in Nevada. The investment is part of the automaker’s push to secure the supply chain for key components in producing electric vehicle batteries. The investment comes when the company is looking to bring a litany of electric sedans, SUVs, crossovers, and trucks to market in the next two years.

It joins the likes of Tesla and Ford, which have also invested in a number of miners as they look to lock in lithium supplies highly needed to develop electric batteries. Every automaker wants to avoid being caught off-guard, as was the case at the height of the chip shortage in 2020.

Chinese and Korea “Superconductor” Stocks Implode After Wild Gains 

The discovery of a superconductor that can allegedly transmit energy without any losses at room temperatures has turned sour. Following the discovery, a number of Korean and Chinese stocks linked to the conductor exploded, some rallying by up to 300%. The stocks remain under pressure to give back nearly half of the gains.

Superconductor Craze and Sell Off

The excitement around the superconductor has dried up fast as it came, eliciting a similar comparison to GameStop and  AMC Entertainment Holdings craze that fizzled afterward, leaving some investors with huge losses.

Sunam Co. and Duksung Co. are some of the stocks feeling the brunt of changing market sentiments after exploding by over 200%, following the discovery. The stocks have already given back more than half of the gains as investors come to terms with the warnings from market regulators and companies about the superconductor.

Reports that the LK 99 does not possess the alleged superconducting capabilities are the latest headwind that’s taken a toll on the stock’s sentiments in the market.  Short sellers have been ramping up bets on the stocks as they had risen to overbought territories, with valuation levels stretching significantly.

Likewise, the losses are also being experienced in North America, with the American Superconductor Corp one of the hardest hit as sentiments in the sector turn sour. Short positions in the stock have already surged to 10% of free-floating shares from zero as of last month.

China’s Jiangsu Fasten Co. and Jiangsu Etern Co. have also experienced wild swings in the market following the superconducting rumor. The stocks initially exploded in line with gains being experienced in South Korea. Still, they came under pressure after the companies confirmed they are not conducting any studies on a metal with such capabilities.

However, investors, willing and able to stomach the volatility, have made significant gains going by the 200% plus rally. Likewise, some shorts sellers continue to generate significant returns as the stocks drop or correct to reflect their actual value following the superconductor debacle

At the height of the US meme stock craze, some traders made a fortune on taking advantage of gains of up to 5,000% on GameStop stock. However, those who held buy positions longer ended up incurring significant losses as the stock corrected from the overbought conditions.

Artificial Intelligence Craze

The Superconductor craze shares some similarities to the artificial intelligence boom that has been on a roll for the past year. Increased focus on the technology has seen stocks with exposure to the technology explode, with valuations increasing significantly. Nvidia is one of the stocks that has benefited from the craze rallying by more than 200%, with its valuation soaring above the $1 trillion level.

Amid the AI boom, some economists and strategists have started raising questions as to whether the gains tied to the technology are overstretched. A point of concern is that some stocks have benefited from the AI craze despite the companies not having anything to report on in terms of innovation. Nvidia is one of the companies that have shown it is benefiting directly from the craze going by the strong demand for its chips to be used in powering the technology. The company delivered impressive second-quarter results backed by solid guidance.

US cybersecurity advisor board investigating Microsoft’s over email breach 

A cybersecurity advisory group in the United States is set to examine potential vulnerabilities in cloud computing. According to sources familiar with the issue the inquiry includes an evaluation of Microsoft Corp.’s involvement in a recent incident where government officials’ email accounts were compromised by alleged hackers with ties to China.

Microsoft under probe over attacks on customer’s accounts  

The Cyber Safety Review Board, established by the Biden administration to probe major cybersecurity incidents, will concentrate on cloud computing infrastructure risks. This includes aspects such as identity verification and authorization control. The committee will conduct thorough assessments of all pertinent cloud solution providers, as outlined by a representative from the Department of Homeland Security. The impetus for this inquiry was underscored by the breach encountered by Microsoft’s email systems. 

The emphasis on cloud computing as the board’s chosen direction comes at the back of a recent appeal by Senator Ron Wyden. The request made last month required inquiry into the involvement of Microsoft in the security breach. Through a letter dated July 27, Senator Wyden urged Attorney General Merrick Garland, Chairperson Lina Khan of the Federal Trade Commission, and Director Jen Easterly of the Cybersecurity and Infrastructure Security Agency (CISA) to investigate the tech giant’s role in the breach and potential lax in its approach to cybersecurity measures.

A representative of the software maker failed to comment on the development as the company continues to experience heightened scrutiny from government agencies and security experts regarding its ability to protect its customers against breaches. Amit Yoran, CEO of cybersecurity firm Tenable Holdings Inc., criticized Microsoft’s lack of transparency regarding breaches, security practices, and vulnerabilities. He highlighted how these deliberately concealed issues put customers at risk.

According to a CISA statement the agency is responsible for managing the board established following a major cybersecurity incidence. This board investigates and produces reports on the causes of these events, along with suggestions for improvements. Easterly recommended that Microsoft should emphasize security, echoing Bill Gates’ call for “trustworthy computing” over adding new features in 2002. 

Easterly said that Microsoft needs to ensure their product are secure by design and by default and the agency will continue working with them to ensure they comply.

Hackers had access to Microsoft’s consumer signing key

The cyberattack targeted US officials’ email accounts, including those of Commerce Secretary Gina Raimondo and State Department personnel, just prior to Secretary of State Antony Blinken’s visit to Beijing for a meeting with President Xi Jinping. The hackers gained unauthorized access to the email networks by exploiting a Microsoft consumer signing key. This allowed them to compromise officials’ email accounts.

The theft of government emails was attributed to a mistake by Microsoft, according to Senator Wyden from Oregon. He criticized Microsoft for having a single “skeleton key” that, once stolen, allowed unauthorized access to private communications of various customers.

Also, Wyden has urged US officials to probe the SolarWinds attack, asserting that Microsoft failed to acknowledge its involvement. In this 2020 attack, Russian state-backed hackers infiltrated federal and private computer networks, causing widespread compromise.

Meta Staring At Advertising Boost on Merging Virtual Reality and Artificial Intelligence

Merging virtual reality and artificial intelligence could be the next frontier for companies like Meta eyeing valuable consumer data for advertising purposes. On the other hand, a merger of the two could present a privacy nightmare that could plunge companies into a massive tussle with regulators.

Virtual Reality AI Combination

A recent study analyzing people wearing virtual reality headsets using machine learning models has uncovered damning revelations that raise serious concerns about privacy protection. By analyzing how people moved while wearing VR headsets, AI-powered applications were able to accurately predict their height, weight, age, and marital states, among other things.

The fact that the combination was able to predict finer details raises the risk of the technologies being used to guess personal data, which could present significant risks of falling into the wrong hands. The two technologies being able to pick out a single person from more than 50,000 in seconds in one of the studies by the University of California underscores how powerful the technology has become.

In the studies, researchers used a machine learning model to analyze data uploaded by virtual reality headsets. Some of the data used included eye and hand movements. Some of the things that the models were able to identify with ease included the age of the people, gender, ethnicity, and country. The fact that the technology could also identify the level of income or disability status, health status, and things like political preference raises serious questions on the privacy front.

Meta Advertising Boost

On the other hand, it is a major development for social networking giants like Meta and Google that rely on such data to power their advertising business. Meta Platform is one of the big players in Virtual reality, having already unveiled its line of headsets. Likewise, the company is betting big on artificial intelligence. By combining virtual reality and AI, the company stands to take its advertising business to new heights.

For instance, gaining valuable insights on the gender, age, health status, and political status of users in its networking apps could come in handy in running more targeted advertising campaigns. For the longest time, the social networking app has been relying on machine learning to access valuable data that allows it to know more about people before targeting them with ads.

However, the company could come under immense scrutiny from regulators and privacy advocates if it is determined it has access to sensitive personal data that need authorization. In 2021, the company found itself at a crossroads after Apple changed its privacy policy. The move limited the amount of data that Meta could access on iPhones to carry out targeted advertising.

Apple policy changes resulted in Meta missing out on $10 billion worth of advertising revenues on iOS devices. The shortfall forced the company to focus on AI that’s helping it predict content and ads that people want to see therefore fuelling its advertising empire.

While Facebook has been running ads on VR headsets, it maintains it does not use data processed and stored on the devices to target ads. Despite the explanation, the company remains under scrutiny partly because of its access to sensitive personal data.

Palantir continues to elicit mixed reactions on Wall Street despite reiterating its plans to commercialize artificial Intelligence and generate significant value from it.  According to the Chief Executive Officer Alex Karp, the focus shifts towards making money from artificial Intelligence instead of just producing AI tools.

Palantir Bullish Thesis

The company is banking on expectations that companies will soon allow their employees to leverage various AI tools to carry out multiple operations. They also expect such tools to play a key role in decision-making. Currently, some companies have imposed restrictions on the AI tools that employees use, but as more information and innovations come to light, Palantir expects the lifting of such bans.

Palantir is already exploring ayes to monetize its artificial intelligence platform AIP as it looks to generate optimum value from it. For instance, it plans to allow businesses, defense, and military organizations to leverage the language models on the platform to make key decisions.

Going by the strides, the company has made around the revolutionary technology, Wedbush Securities analyst Dan Ives believes the company is a star in the making. Likewise, the analyst has reiterated an outperform rating on the stock with a $25 price target that implies more than 30% upside potential from current levels.  According to the analyst, Palantir is a pure AI play that aims to monetize AI beyond government departments.

Palantir has already engaged more than 300 enterprises, all looking to leverage its AI platform as they look to adapt to the latest LLMs for use in internal systems and for analyzing proprietary data. The company has already secured a $463 million five-year contract from the U.S Special Operations Command in which it is expected to leverage its AI tools.

Palantir Bearish Thesis

However, not all analysts agree about Palantir’s solid long-term prospects. RBC Capital Markets Rishi Jaluria believes the company is overpriced and is worth much less than current levels. The analyst has an underperform rating on the stock with a $4 price target, which implies a 72% downside potential from current levels.

According to the analysts, Palantir is not a pure AI generative company as there is nothing that appears to be ordinary compared to other players in the sector.  The analyst feels AI will become part of the service that the tech company has been offering with minimal value. The fact that the company is not adding anything unique means it won’t be a leader in generative AI.

The sentiments are familiar, as there have been growing concerns as to whether companies will live up to expectations and generate significant value from the technology. For the most part, companies are yet to provide detailed information on how AI is poised to be a game changer in their long-term valuations.

Many analysts and strategists feel that the AI hype has been overstretched without something concrete to report on.  Nvidia is one of the few companies that have emerged as an ideal AI play going by the strong demand for its graphic processing Units used in powering and enabling various AI functions and capabilities. Likewise, the company has remained the darling of the AI space, with its stock rallying by more than 200% year to date.