Meta Stock Returns Pale Next To Peter Thiel's Secretive Data Company Even As Mark Zuckerberg Company's AI Advancements Generate Excitement

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Meta Platforms, Inc. (NASDAQ:META) and Palantir Technologies, Inc. (NYSE:PLTR) are among the artificial intelligence stocks that have seen strong gains since early to mid-September. While the former is perched at a record high, the latter, despite its recent strong run, is yet to reclaim its Jan. 2021 peak.

Here’s a look at the relative performance of these two stocks and what the near-term holds for them:

Meta Vs. Palantir: Meta has gained over 68% for the year-to-date period, while Palantir is up a steeper 133%. The data analytics company co-founded by Peter Thiel is the fourth best-performing S&P 500 company this year, while Meta, co-founded by Mark Zuckerberg, holds the 11th spot on the list.

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Both stocks have outperformed the broader market, as represented by the SPDR S&P 500 ETF Trust (NYSE:SPY) – an exchange-traded fund that tracks the S&P 500 Index.

Valuations of both stocks have become expensive following the recent spike. The forward price-earnings ratio for Palantir is currently at a hefty 95.2 but Meta is trading at a more modest forward P/E valuation of 24.75. The social media giant’s P/E ratio is fairly in line with 21.3 which is applicable to the communications services sector.

The Palantir Rally: Palantir has been on an uptrend since it gap-opened higher on Sept. 9, the first session after the S&P Dow Jones Indices said the company would be added to the S&P 500 Index, effective prior to the start of trading on Sept. 23. Commenting on the feat, Wedbush analyst Daniel Ives said, “The profitability profile of this story has significantly been bolstered with this another validation moment for the Palantir story.”

Although there was a ‘buy the rumor, sell the news’ moment after the inclusion, the stock has been grinding solidly higher since the start of October.

Meta Connects With Investors: After the early August broader market swoon set in motion by yen carry-trade unwinding, Meta’s stock found its feet shortly after and climbed higher until mid-August. The stock experienced a mild pullback that lasted through mid-September.