Many tech stocks enjoyed impressive benefits over the last year or so. Such two strains are Palantir Technologies (pltr 6.43%)) and reddit (rddt) 8.03%)).
Palantir shares have skyrocketed over 250% over the past 12 months until March 20th. RedditStock surged from its 52-week low of $37.35 last April to a staggering high of $230.41 in February.
And now it may be time to win stocks in one of these businesses. Uncertainty over the US economy and Donald Trump's tariffs has caused stock market volatility over the past few weeks, pushing down the prices of many stocks, including Palantil and Reddit.
Both have dropped significantly from the 52-week highs that reached February.
pltr Data based on data YCHARTS
Which is the better purchase now?
Palantir's AI Strength
Palantir is suitable for exploiting the rapidly expanding artificial intelligence industry. The company has spent many years creating digital tools that allow software to understand the relationships between all types of data. Ontology is at the heart of AI platforms (AIP), and is why AIP allows organizations to implement AI in just a few days.
AIP hit customers and Palantir sales skyrocketed. It ended in 2024 with revenue of $2.9 billion, up 29% from $2.2 billion in 2023.
Not only is Palantir's revenue rising, it also runs a profitable business. It reported a high 80% gross profit margin in 2024. This earned a net profit of $468 million last year, up from $217 million in 2023.
Palantir is then expanding its business to multiple $1 manufacturing businesses using its new product, Warp Speed. Released in 2024, Warp Speed aims to enhance manufacturing with AIP fuel software to manage elements such as supply chains and resource planning.
Reddit's Social Media Success
Reddit stocks have exploded over the past year (up 165%). First of all, the social media giant showed strong user growth in 2024.
Reddit ended 2024 with a 101.7 million “daily active unique” (DAUQ), up 39% year-on-year. DAUQ is someone who visits Reddit's website or mobile app once every 24 hours a day.
As a social media company, Reddit relies on users to thrive virtual communities. It is essentially a huge online forum where people can take part in discussions about a huge range of topics and interests.
The number of DAUQs is also important as the company relies on revenue ads, and the more people you see on Reddit, the more users your company can generate, the more users it can generate. That was shown in the company's 2024 performance.
Reddit has finished 2024 and surpassed the $1 billion revenue mark with $1.3 billion in sales. The results represent an astounding 62% growth over $804 million in 2023.
Not only does Reddit attract users and thereby increase revenue, but the company also runs a highly profitable business. That total margin reached an impressive 90.5% in 2024. This is a significant increase from 86.2% the previous year.
As a result, Reddit ended the fourth quarter with a net profit of $71 million from $18.5 million in 2023. However, Reddit had a net loss of $484.3 million due to expenses related to last year's IPO.
However, with the high gross profit margins behind 2024, Reddit is well positioned to expand its fourth quarter profitability into subsequent quarters.
Select Palantir and Reddit
Powerful performance offered in 2024 Palantir and Reddit explain why both saw the stock rise. In 2025, they expect sales to continue to grow.
Palantir forecasts its first quarter revenues to at least $858 million, a 35% jump from $634 million the previous year. Meanwhile, Reddit expects first quarter revenue to range between $360 million and $370 million. This represents a minimum 48% increase from revenue of $243 million in the first quarter of 2024.
Given their strong business performance, choosing these tech stocks is a challenge if you want to buy just one. As a tiebreaker, let's look at the ratings of both companies using previous price and revenue (P/E) ratios. This metric shows how willing investors will pay for dollar-worthy revenues based on estimates of revenue over the next 12 months.
Data based on data YCHARTS.
Recent stock market volatility has resulted in a hit with Palantir and Reddit stocks, both of which have reduced P/E multiples from February to March. Still, Reddit's 36 forward P/E is significantly lower than Palantir's 156. This indicates that Reddit stock is a better value.
Both offer outstanding results, and given that they both offer outstanding results, you can own stock in both. But if you need to choose one, Reddit's excellent rating gives Palantir the advantage as a tech stock to buy now.
