The latest advances in artificial intelligence (AI) have created a lot of buzz since early last year. These next-generation algorithms’ ability to create original content, streamline processes, and increase productivity has businesses far and wide racing to capture their share of the resulting windfall.
One company uniquely positioned to profit from these secular tailwinds is Palantir Technologies (NYSE: PLTR). Its decades of experience developing AI helped the company pivot to embrace the demand for generative AI, and that move has been a boon to Palantir and its shareholders. Indeed, the stock has soared 477% since the start of 2023, fueled by improving results and the company’s expanding opportunity.
Over the past week, the good news has come fast and furious for Palantir. With so much happening, investors may not have caught all the recent developments. Here are four things Palantir investors may have missed this week.
1. Expanding its relationship with Nebraska Medicine
To kick off the week, Palantir announced an expansion of its pioneering partnership with Nebraska Medicine to advance healthcare using AI, resulting in a new multiyear, multimillion-dollar contract.
Nebraska Medicine is an early adopter of Palantir’s Artificial Intelligence Program (AIP) and has “implemented more than ten applications of AIP, improving patient throughput, expanding claims reimbursements, and better monitoring patient care.” It noted that AIP helped the health system to develop a new workflow in less than six weeks, with additional breakthroughs in as little as 90 minutes.
One example is the improvements to Nebraska Medicine’s Discharge Lounge, which has experienced a 2,000%+ increase in utilization. This reduced the time necessary to discharge patients by one hour, on average, freeing up bed space for other patients.
2. A strong vote of confidence
Analysts at Bank of America (BofA) Securities added Palantir to the firm’s US 1 list. To be included in the list, a stock must be listed in the U.S., have a buy rating, and be covered by the investment bank’s equity research analysts. The stock must also have an average daily trading volume of $5 million during the preceding six months. The list is meant to represent BofA’s best investment ideas.
The analysts cited Palantir’s groundbreaking Warp-Speed platform, which was designed to integrate various aspects of manufacturing systems. It combines elements of enterprise resource planning (ERP), manufacturing execution systems (MES), product lifecycle management (PLM), programmable logic controllers (PLCs) for factory automation, and even input from workers on the factory floor.
The analysts described it as “a tool that could transform the American industrial base,” leading to its inclusion in the list.
3. Expanding the Maven Smart System
Palantir announced that it had been awarded a contract by the DEVCOM Army Research Laboratory to expand its Maven Smart System across all branches of the military service, including the Army, Air Force, Space Force, Navy, and U.S. Marine Corps. Maven is an AI-based targeting tool that is part of the National Geospatial-Intelligence Agency’s Maven AI framework. Palantir said it acts as the “connective tissue” between troops on the ground, battlefield sensors, hardware, and software.
The fixed-price contract could be worth as much as $99.8 million over the next five years and will improve the military services’ AI and machine learning capabilities.
4. Joining the S&P 500
Finally, Friday marked the last trading day before Palantir joined the S&P 500. The S&P is the most widely recognized benchmark in the country, made up of the 500 largest companies in the U.S. As such, it’s also viewed as the best gauge of overall stock market performance.
Palantir will be added to the prestigious index when the market opens on Monday and is one of only 11 companies to join its ranks so far this year.
There is a strict set of criteria required to be added to the S&P 500, and Palantir has passed with flying colors.
While this might seem trivial, Bank of America analyst Mariana Pérez Mora calls it a “watershed moment.” The analyst believes there’s a “fundamental misunderstanding” concerning Palantir, and its addition to the widely followed index will force institutional investors to revisit what they think they know about the AI pioneer. A better grasp of what Palantir does and the fundamental opportunity ahead could help dispel those misunderstandings, increasing demand and driving the stock price even higher.
That’s why the analyst maintains a buy rating and Street-high $50 price target on Palantir stock, which represents a potential upside of 34% — despite already notching gains of 477% since early last year.
Given the business trajectory, the vast opportunity, and management’s consistent execution, I believe that price target will end up being conservative.
Should you invest $1,000 in Palantir Technologies right now?
Before you buy stock in Palantir Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $710,860!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 16, 2024
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Danny Vena has positions in Palantir Technologies. The Motley Fool has positions in and recommends Bank of America and Palantir Technologies. The Motley Fool has a disclosure policy.
4 Things Palantir Investors May Have Missed This Week was originally published by The Motley Fool
