2 Stocks Like Palantir (PLTR) To Watch Right Now

The defense industry has certainly had a lot of buzz lately.

Most stocks in this niche are getting attention, and Palantir (NASDAQ: PLTR) is one of the biggest names despite its “is it or isn’t it” status in the defense space. 

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Constantly in the headlines, the defense stock (or AI stock, depending on how you look at it) has been a popular choice among investors, yet it has not exactly had the best month. 

Here’s the weird thing. It absolutely CRUSHED earnings.

Revenue grew about 85% year-over-year — the fastest increase since the company went public — and full-year guidance was raised to $7.65B, well above the prior $7.19B forecast.

Yet despite strong Q1 earnings and raised guidance, PLTR has dropped as investor concerns over valuation and competition overshadowed the results. 

This leads some to wonder whether it’s time to buy the dip as a value play on PLTR.

Palantir may be more of a risk than other stocks lately. For one, its actual earnings may not align well with the price (currently, it is 141.57x P/E). In our Zen Ratings system, which measures stocks by 115 carefully selected criteria across 7 components, the Component score for Value is D. 

Its total Zen Rating is C, indicating it’s in the middle of the pack. Essentially, PLTR is facing intense competition in a space that’s largely driven by speculation. That spells extra risk and opportunity. However, while you could do worse, there are better options, whether you’re looking into software or defense stocks. 

Feeling nervous about buying the dip?

Good news: We found you some worthy alternatives. Here are two A-Rated defense or defense-adjacent stocks that are worth a bit more of a look…

Sifco Industries (NYSEMKT: SIF)

Providing components for both the aerospace and energy industries, Sifco is in a good position at the moment, given the demands of the defense industry at the moment and the energy needed for AI datacenters and operations.

Looking at its Component Grades, SIF is on a strong path, with A grades in Growth, Momentum, and Financials. While our AI algorithms indicate potential issues, there is plenty else to keep investors confident and interested, specifically where it might be headed in the near and long-term future.

It is also benefiting from an extremely strong rally over the last year, yet it remains an above-average value proposition while the company maintains a backlog of orders. While you may (or may not) have missed the initial price surge, there may still be growth to be had with SIF.

Smith and Wesson Brands, Inc (NYSEMKT: SWBI)

Perhaps a bit more small-scale than the large-scale national defense and weapons stocks you might be familiar with, SWBI is having a generally excellent time after a rough few years. It’s working with relatively strong cash reserves, a good financial position, a low debt-to-equity ratio (0.48), and is likely to benefit from strong demand for its products for the foreseeable future.

In addition to its Zen Rating of A, the firearms manufacturer has Component Grades of A for Sentiment and B for Momentum and Financials. SWBI is gaining popularity among key investors and is riding that momentum to strong increases recently, including a +65.47% price increase over the past 12 months. 

Investors will want to carefully watch consumer demand for firearms worldwide, how strong SWBI’s financial position remains, and whether it becomes overvalued.

Want to know more about and more easily keep track of the above stocks, among others? Then WallStreetZen Premium is exactly what you need. With it, you’ll get an unlimited watchlist, all of the fundamental information you need, access to premium stock ideas pages, and more.

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