Crypto Titans: 2 Digital Assets Set to Eclipse Palantir’s Value Within 5 Years
Forget traditional tech stocks—the real wealth creation engine is shifting to blockchain infrastructure.
The DeFi Domination
While Palantir struggles with government contract cycles, decentralized protocols are eating traditional finance at lightning speed. One emerging Layer-1 blockchain has already processed 50% more transactions than Ethereum did at the same stage.
The AI-Crypto Convergence
Another project merging artificial intelligence with decentralized computing has attracted 3x the developer activity of Palantir's entire engineering team. Their testnet handles AI model training at 1/10th the cost of centralized alternatives.
Wall Street analysts still don't get it—they're busy downgrading crypto projects while missing the 400% institutional adoption surge happening right under their noses. The future isn't in data mining, it's in decentralized value creation.
ASML's AI tailwind
A company that is perhaps poised to benefit even more from AI than Palantir is(ASML 0.99%). The Netherlands-based Maker of computer chip manufacturing equipment is not a household name outside of small investing circles, but it is one of the most important companies in the semiconductor supply chain.
Without ASML and its lithography printing tools, advanced computer chips built for brands likeorwould be impossible to make. This has given ASML not only a large backlog as manufacturers try to catch up with AI chip demand, but also superb pricing power on its machine sales.
A new version of ASML's lithography equipment reportedly is costing chipmakers $400 million. That shows how valuable the AI revolution is, and how important ASML is in the semiconductor supply chain powering it.
Five years from now, ASML is expecting to generate between 44 billion and 60 billion euros ($51 billion to $70 billion) in annual revenue. Palantir's revenue is only $3.44 billion today and will come nowhere NEAR $70 billion five years from now. Plus, ASML has better profit margin at 35% as measured by earnings before interest and taxes (EBIT) compared to Palantir's 17%.
Both factors give ASML the edge as a potential investment today, and why I think it is likely that the semiconductor equipment company will have a larger market cap than Palantir in five years.
A European luxury giant
A company not associated with AI -- and perhaps one of the few businesses immune to AI risks -- is (HESAY 1.88%). The maker of premier luxury handbags and leather goods is experiencing a steady drumbeat of growth that is relatively immune to the economic cycle. With a long history of catering to the ultra-wealthy with bags that go for $10,000 or more, Hermès enjoys significant pricing power because of the allure of its artisanal French leather goods.
Despite a slowdown in consumer spending in China and among its luxury peers, Hermès revenue grew 8% year over year last quarter to 8 billion euros ($9.4 billion). This was driven by 11% growth in Europe, 16% growth in Japan, and 12% growth in the Americas.
Asian markets excluding Japan, which is mostly China, grew just 3% year over year in the quarter. Once the Chinese economy stabilizes, Hermès may see accelerating revenue growth in the coming years because it is the largest market for luxury goods in the world.
The company has impressive pricing power, which gives it EBIT margins that surpass Palantir and ASML: 41% over the last 12 months. Revenue grows at a consistent pace due to the durable customer demand in the ultra-wealthy demographic, giving the company a revenue chart that looks like a subscription software company. Revenue has grown 218% over the last 10 years; I expect similar levels over the next 10.
With consistent revenue growth and far superior profit margins, Hermès should be a much larger company than Palantir five years from now, making it a better bet today.
