Investing in Emerging Growth Stocks: DraftKings and Palantir Technologies Under $100

Explore the potential of DraftKings and Palantir Technologies as promising growth stocks under $100, capitalizing on expanding markets in sports betting and AI-driven decision-making, while considering expert investment advice.
SummaryInvesting in growth stocks can yield substantial returns, with DraftKings and Palantir Technologies being two promising options under $100. DraftKings is capitalizing on the expanding sports betting market, operating in 27 states and exploring international opportunities. With potential markets like Texas and California still untapped, DraftKings is poised for further growth, aiming for up to $1 billion in adjusted EBITDA by 2025. Meanwhile, Palantir Technologies leverages its advanced AI and machine learning capabilities to assist businesses and government agencies in data-driven decision-making. With strong government contracts and corporate partnerships, Palantir’s financial performance is robust, recently resulting in its inclusion in the S&P 500. While these stocks are attractive, potential investors should consider expert advice, as Palantir was not among the top ten stocks recommended by the Motley Fool’s Stock Advisor team, which has a strong track record of outperforming the S&P 500.

The Potential of Growth Stocks

Investing in growth stocks can yield substantial returns for shareholders. However, the real challenge lies in identifying which stocks to purchase and determining the optimal timing for investment. For those with extra funds available for investment—funds not earmarked for daily expenses or debt repayment—consider these two promising growth stocks, each available for under $100.

Top Growth Stock #1: DraftKings

Sports Betting: An Expanding Market

Profit opportunities often lie within rapidly expanding markets poised for further growth, and sports betting fits this bill perfectly. DraftKings stands out as a notable player in the ongoing trend of sports betting legalization.

Legalization Driving Revenue

As governments seek new revenue streams, many are turning to the legalization of sports gambling. DraftKings has capitalized on this movement, currently operating sportsbooks in 27 states. Moreover, it is making strides in international markets, such as Canada and the UK, by launching its sports betting platform in Ontario and daily fantasy sports products in the UK.

Future Prospects and Market Expansion

Massive markets like Texas and California have yet to legalize sports gambling, presenting DraftKings with substantial opportunities for expansion. Predictions by Future Market Insights suggest that the global sports betting industry could grow from $92 billion in 2023 to over $245 billion by 2033.

Revenue Growth and Profitability

DraftKings excels at launching operations in newly legalized markets, swiftly attracting customers. This strategy led to a 26% year-over-year revenue increase, reaching $1.1 billion in the second quarter. The platform’s monthly unique payers surged by 50% to 3.1 million.

Additionally, DraftKings is enhancing profitability as it matures. Initially, it invests heavily in marketing to acquire customers in new markets. However, within two to three years, these markets begin generating profits, allowing the company to reduce marketing expenditures.

Financial Outlook

DraftKings anticipates generating up to $1 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by 2025, rising from an expected $420 million in 2024. This promising financial trajectory makes DraftKings an attractive investment. The company’s confidence is mirrored by its board’s approval of a $1 billion share repurchase program on July 30.

Top Growth Stock #2: Palantir Technologies

AI: A Transformative Force

Artificial intelligence (AI) is another powerful growth trend, and Palantir Technologies is at the forefront with its cutting-edge machine learning and AI technologies.

Data-Driven Decision Making

Palantir aids businesses and government agencies in making informed decisions by processing vast amounts of data in real-time. This capability allows clients to quickly identify significant patterns, unlocking valuable insights at remarkable speeds.

Government and Business Applications

Palantir’s technology has long been trusted by the U.S. military, with early backing from the Central Intelligence Agency. Its software was even instrumental in locating Osama bin Laden. Today, demand remains robust, as evidenced by a Department of Defense contract licensing Palantir’s AI-powered operating system, valued at up to $480 million.

In the corporate realm, companies like BP utilize Palantir’s AI simulations to enhance oil and gas production efficiency. Meanwhile, Wendy’s employs Palantir’s Artificial Intelligence Platform (AIP) to streamline ordering processes and minimize waste across its restaurant network. Oracle has also made AIP available to its rapidly expanding cloud computing service users.

Financial Success and Market Recognition

Palantir’s financial performance is noteworthy. In the second quarter, revenue and adjusted earnings per share increased by 27% and 80%, respectively, reaching $678 million and $0.09. This success contributed to Palantir’s robust balance sheet, which boasted $4 billion in cash reserves by June’s end. Notably, Palantir is set to join the S&P 500 index on September 23, underscoring its financial strength and profitability.

Considerations Before Investing in Palantir Technologies

Before investing in Palantir Technologies, it’s essential to weigh the advice of experts. The Motley Fool’s Stock Advisor analyst team recently identified what they consider the 10 best stocks for current investment—and Palantir Technologies was not among them. These selected stocks have the potential to deliver significant returns in the future.

For instance, had you invested $1,000 in Nvidia on April 15, 2005, following their recommendation, your investment would have grown to $710,860.*

The Stock Advisor program offers a comprehensive strategy for success, including portfolio-building guidance, regular analyst updates, and two new stock picks monthly. Since 2002, Stock Advisor has outperformed the S&P 500 more than fourfold.*

Explore the 10 recommended stocks ›

*Stock Advisor returns as of September 17, 2024.

Aya Kimura
Aya Kimura

Aya Kimura: The Screen's Storyteller

At 26, Aya Kimura is a rising star in the world of TV entertainment journalism, known for her captivating writing and sharp analytical prowess. With her striking black hair and an infectious enthusiasm for storytelling, Aya brings a unique and vibrant perspective to the television news landscape.

Born and raised in San Francisco, California, Aya grew up in a household that cherished creativity and cultural diversity. Her parents, both avid film enthusiasts, introduced her early on to a variety of genres and styles, instilling in her a deep appreciation for the power of visual storytelling. This early exposure ignited a passion that would shape her future career.

Aya pursued her love for media and storytelling at UCLA, where she majored in Communications. During her college years, she launched a popular podcast that delved into both mainstream and niche television shows, quickly gaining a dedicated following for her engaging discussions and insightful critiques.

Now a well-regarded journalist, Aya writes for a leading entertainment website, covering everything from the latest series premieres to in-depth interviews with industry insiders. Her articles are celebrated for their blend of cultural commentary and personal reflection, often exploring how television reflects and influences societal trends.

Outside of her professional life, Aya is an advocate for environmental sustainability, often volunteering with local organizations that focus on conservation and green initiatives. Her passion for the planet is a recurring theme in her writing, where she highlights shows that address environmental issues and promote eco-friendly practices.

In her personal time, Aya enjoys practicing yoga and exploring the culinary scene in her city, always on the lookout for new flavors and experiences to share with her readers. She is also an amateur photographer, capturing the vibrant street life and natural beauty of San Francisco through her lens.

With a keen eye for storytelling and a commitment to authenticity, Aya Kimura continues to make her mark in the world of television journalism. Her work not only informs but also inspires, encouraging her audience to see the world of TV through a fresh and insightful lens. As she continues to grow her career, Aya's voice promises to be a guiding light in the ever-evolving landscape of television entertainment.

Articles: 25

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