Did You Miss Palantir? Top Funds Bet This AI Peer Could Pop Next

Palantir Technologies (PLTR) just rocketed out of buy range on earnings. Now top money managers have placed their bets on artificial intelligence and robotic process automation (RPA) firm UiPath (PATH) to blast off next. As PLTR stock soars, PATH stock targets a new breakout, fueled by 140% earnings growth.




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Both UiPath and Palantir made this month’s list of new buys by the best mutual funds, which comes out Friday. Proving the AI boom is far from over, 14 more peers from the enterprise software industry also made this screen.

Others also showing strong institutional demand include ServiceNow (NOW), Salesforce.com (CRM), Parsons (PSN), Shopify (SHOP) and Monday.com (MNDY).

While top-performing funds pick up shares in PATH stock, tech powerhouses like Microsoft (MSFT), SAP (SAP) and Amazon.com (AMZN), through its Amazon Web Services cloud business, partner with UiPath to help enhance productivity.

UiPath Uses AI And RPA To Automate Mundane Tasks

Based in New York, UiPath says automation and AI offer “unprecedented opportunities” to innovate, aiming to eliminate the need for client employees to do manual and mundane tasks.

To do that, UiPath focuses on providing RPA solutions that enable clients utilize AI-powered enterprise automation technology.

In November, the company unveiled new enhancements to its UiPath Business Automation Platform. According to the company, the new features add value by enabling clients to transform millions of tasks and thousands of processes across their enterprises with AI and automation.

UiPath works across a wide range of sectors, including health care, manufacturing, insurance, financial services and more.

UiPath Back On Growth Track

Soon after its IPO in April 2021, shares of UiPath entered a long and steep decline. But around the same PATH stock bottomed out in November 2022, the AI and RPA firm’s fundamentals began to pick up — in a big way.

In Q3 of fiscal 2023 (ended Oct. 31, 2022) and Q4 of fiscal 2023 (ended Jan. 31, 2023), UiPath posted year-over-year earnings growth of 400% and 200%, respectively.

The company followed that with two more quarters of triple-digit EPS gains, although those percentage gains were based on prior-year quarters that showed a loss.

In UiPath’s most recent report on Nov. 30 (for Q3 of fiscal 2024), the company generated earnings of 12 cents a share. That marked a 140% year-over-year increase.

Revenue for the quarter grew 24% to $325.9 million, marking a third quarter of accelerating growth.

That performance earns UiPath the highest-possible 99 Composite Rating. PATH stock shares that honor with industry peers Palantir, ServiceNow, Salesforce and JFrog (FROG), which is soaring Thursday.

PATH Stock Bumpy, But Gaining Steam

On a daily chart, you can see how PATH stock gapped in huge volume on Dec. 1 following its strong earnings report the prior evening.

After rising for several more days, UiPath pulled back to form its current base, an early stage consolidation. The new buy point is 26.52.

The stock gained around 1.4% Wednesday, lifting it a hair above its 50-day moving average. Early Thursday, PATH stock is up nearly 6% in heavy volume. It sports a strong A- Accumulation/Distribution Rating and 1.6 up/down volume ratio.

As Palantir soars and industry peers like ServiceNow and Salesforce also show strength and institutional demand, see if UiPath can ride its own AI and automation trends on the way to a new breakout.

Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.

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