Peloton (PTON) is back in the spotlight, with shares popping over 3% today following a Bank of America upgrade.
Analysts raised their price target from a low $3.75 to a more optimistic $9 per share, breathing new life into the stock.
But even with this bump, Peloton’s market cap remains under $3 billion, a stark contrast to the $50 billion valuation it enjoyed at the height of the pandemic.
One of the key reasons for optimism is Peloton’s recent hire: Peter Stern, a former executive from Apple (AAPL) and Ford (F).
Stern, known for co-founding Apple Fitness+ and previously serving as Ford’s President of Integrated Services, is set to officially take the CEO role on January 1, 2025.
His mission?
Tackle Peloton’s high operating expenses, which have been a significant drag on profitability.
According to their fourth-quarter 2023 earnings report, Peloton pulled in $643.6 million in revenue, slightly up from $642.1 million year-over-year.
However, they're still facing hefty annual operating expenses nearing $1 billion.
Looking forward, Peloton has set a cautious annual revenue projection of $2.4 billion to $2.5 billion for fiscal 2025, down from $2.7 billion in fiscal 2024.
For investors, the hope is that Stern’s expertise will lead to significant cost cuts, potentially by 15-20%, which could help Peloton reach profitability and position itself for long-term growth.
Should you buy in?
If you’re looking for a speculative pick, Peloton may be worth considering.
Stern’s arrival could be the turnaround Peloton needs, but the company has work to do.
With no guarantees of quick profitability, this remains a high-risk, high-reward play, best suited for those with a bit of extra cash they’re willing to risk.
Next, we have Plug Power (PLUG), which had an incredible day with shares climbing 19.9%.
The excitement was fueled by a decision from the Federal Energy Regulatory Commission (FERC), which denied the Susquehanna nuclear plant’s request to supply additional power to a new Amazon data center campus.
With nuclear off the table for now, attention shifted to alternative energy solutions, giving Plug Power’s hydrogen tech a boost.
Plug Power has carved out a niche with its hydrogen electrolyzers and fuel cells, both critical components for a hydrogen-powered ecosystem.
However, hydrogen infrastructure remains expensive.
Plug Power estimates the cost of producing hydrogen at $6–$7 per kilogram, significantly pricier than traditional energy sources like natural gas or electricity.
Despite steady growth, the company’s financials tell a challenging story: in 2023, Plug Power generated around $700 million in revenue but ended the year with a substantial net loss of approximately $600 million.
Should you invest?
While hydrogen tech has promise, Plug Power’s profitability is still a long way off.
The high costs and current lack of profits make this a risky venture for most investors.
Unless the hydrogen sector achieves more cost efficiencies, Plug Power might struggle to become profitable in the near term.
For most, holding off until the company shows signs of financial stability could be the wiser choice.
Plug Power’s innovations are exciting, but they’re still far from being a clean-energy powerhouse.
Palantir (PLTR) has scored another win, posting $725.5 million in third-quarter revenue—a 30% increase year-over-year, beating analysts’ expectations of $703.7 million.
With net income reaching a record $144 million, the company’s stock soared 15% in after-hours trading.
CEO Alex Karp attributes this growth to “unwavering demand” in the U.S., which now drives around 70% of Palantir’s revenue, or $499 million for the quarter.
Palantir is raising its full-year revenue forecast to $2.81 billion, boosted by significant traction in both commercial and government sectors.
U.S. commercial revenue alone spiked 54% to $179 million, while U.S. government revenue grew 40% to $320 million.
Palantir’s introduction of new AI tools and its inclusion in the S&P 500 have led to over 140% growth in its stock price this year.
Additionally, a new partnership with Microsoft allows them to deploy OpenAI models in secure environments, expanding Palantir’s AI applications with the U.S. military and allies in conflict zones like Ukraine and Israel.
For investors, Palantir’s explosive growth and strong U.S. market demand position it firmly as a leader in the AI revolution.
