Anticipation: Two Outstanding Stocks Are Likely to Surpass Palantir Technologies' Value by Year's End in 2025
Palantir Technologies (PLTR shedding -3.72%) has seen shares surge an impressive 360% this year, outstripping the next best performer in the S&P 500 (^GSPC shedding -1.11%) by a substantial 100 percentage points. With a market cap now standing at an astounding $180 billion, certain financial analysts predict that Shopify (SHOP shedding -1.62%) and Uber Technologies (UBER shedding -0.70%) could overtake this figure before the end of 2025.
- Shopify is currently valued at $140 billion. To surpass $180 billion, the stock price would need to swell by 29% in the coming year. Loop Capital's equity analyst Anthony Chukumba foresees this as a plausible prospect, as he recently upgraded his target price to $140 per share, which implies a potential 30% upside from its current trading price of $108.
- Uber Technologies is currently worth $129 billion. A 40% stock price surge is necessary for the company's market cap to reach $180 billion. Several Wall Street pundits share this view. The medians among 59 experts indicate a target share price of $90, implying a 48% increase from the current share price of $61.
Here's what investors ought to be aware of regarding Shopify and Uber Technologies.
1. Shopify
Shopify provides an all-in-one commerce solution, empowering businesses to sell both physical and digital goods across various platforms. Its software manages sales, payments, bills, taxes, and accounting. Shopify offers merchants marketing, logistics, wholesale commerce, and other essential tools to enhance their operations.
Shopify's breadth and user-friendliness have propelled it to prominence in the e-commerce market. Its merchants account for over 10% of online sales in the U.S. and 6% in Western Europe, making Shopify the second-largest e-commerce player in those regions, trailing behind Amazon.
Recently, Shopify has been recognized as a leader in wholesale commerce solutions by both Forrester Research and the International Data Corporation. Given the wholesale market's enormous size and faster growth rate (four times larger and growing 50% faster than retail, according to Grand View Research), this recognition is particularly noteworthy.
Shopify reported impressive financial figures in Q3. Revenue grew 26% to $2.1 billion due to strong growth in subscription software and merchant services. Non-GAAP net income rose 46% to $0.35 per diluted share. Shopify forecasts similar revenue growth for Q4, with encouraging trends continuing in the international market, wholesale commerce, and offline retail.
Wall Street anticipates Shopify's adjusted earnings to increase at a 25% annual rate through 2025. Despite looking expensive given the current multiple of 94 times adjusted earnings, patient investors accustomed to volatility can still consider purchasing a modest position today. Shopify has beaten consensus earnings estimates for eight consecutive quarters.
2. Uber Technologies
Uber is dominant in U.S. ride-sharing with a 76% market share, according to Bloomberg. In the food delivery sector, Uber ranks second, accounting for 24% of the market. Uber's extensive user base provides it with a significant competitive advantage, enabling efficient demand prediction and route optimization.
Uber wins another edge by offering ride-sharing and food delivery services through a single mobile app. This caters to cost-effective customer acquisition, as Uber can market both sides of its platform to its users. For example, 31% of first delivery trips originate from mobility users, and 22% of first mobility trips originate from delivery users.
In Q3, Uber displayed resilient financial performance despite missing gross booking estimates. Total revenue increased 22% to $11.1 billion, driven by robust sales growth in the mobility segment (29%) and modest growth in the delivery segment (19%). Non-GAAP net income rose 46% to $0.35 per diluted share.
During the earnings call, Uber CEO Dara Khosrowshahi revealed that Uber One membership had surged 70% in the quarter. He also shared that Uber's advertising sales had increased by 80%. Investors may be overlooking this opportunity, as Piper Sandler analyst Tom Champion forecasts that Uber could generate $5 billion in advertising revenue by 2027.
Wall Street projects Uber's adjusted earnings to increase at a 13% annual rate through 2025. The current valuation of 30 times adjusted earnings appears tolerable to patient investors, making it an attractive buy opportunity to acquire a few shares of Uber stock today.
Lastly, Uber shares have dropped 30% from their peak, resulting in some investor concern regarding the impact of autonomous vehicles. However, many analysts believe Uber can benefit from robotaxis due to its strong market position as the largest demand aggregator in the ride-sharing sector. Indeed, Uber has already partnered with Waymo in various markets.
Shopify's potential for further financial growth in the e-commerce market has caught the attention of financial analysts, with some predicting that it could require an additional $30 billion in market capitalization to surpass Palantir's current value, which equates to a 29% increase in its stock price. This investment opportunity in Shopify could yield a potential 30% upside from its current trading price of $108, as suggested by Loop Capital's equity analyst Anthony Chukumba's upgraded target price of $140 per share.
To achieve a market cap of $180 billion, Uber Technologies would need to experience a significant 40% increase in its stock price. This prospect is not out of reach, as several Wall Street pundits share the notion that Uber's market value could attain this figure, with a median target share price of $90 indicating a 48% increase from its current share price of $61. These potential gains in both Shopify and Uber Technologies present viable opportunities for investors interested in the finance and investing sector.
