Palantir Technologies (NYSE: PLTR) has been among the early beneficiaries of the accelerating adoption of artificial intelligence (AI) — and with good reason. The company’s AI solutions have been gaining traction with enterprise and government customers, fueling strong sales and profit growth. In another telling sign, Palantir recently joined the S&P 500, sending the stock 25% higher in the roughly two weeks since the announcement was made.
One Wall Street analyst believes this is just the beginning.
Next stop: $100?
In an interview on Fox News, Greentech Research analyst Hilary Kramer said that among AI stocks, “Palantir is my absolute 100% favorite,” noting the company is a “true artificial intelligence company,” analyzing data to provide businesses with “actionable decision-making.”
The analyst goes on to note that many of her colleagues continue to underestimate Palantir. Given the company’s strong revenue, profit growth, and growing backlog, investment banks will eventually have to get on board and increase their estimates, opining that Palantir “easily can be” a $100 stock.
I think the analyst hit the nail on the head. In the second quarter, Palantir’s revenue of $678 million jumped 27% year over year, delivering adjusted earnings per share that soared 80% to $0.09.
The headliner was the company’s U.S. commercial segment, as revenue of $159 million jumped 55%, and now accounts for 23% of Palantir’s total revenue. The segment’s customer rolls surged 83%, while its remaining deal value — or contracts not yet counted as revenue — soared 103%.
Palantir’s Artificial Intelligence Platform (AIP), its generative AI solution, is driving that robust growth. The company puts on AIP boot camps, pairing business and government customers with Palantir engineers to create solutions to real-world problems. This has helped fuel the company’s recent growth spurt.
Furthermore, management increased its full-year outlook for the second time. Palantir now expects full-year revenue of $2.75 billion, an increase of 23%.
Palantir stock boasts a forward price/earnings-to-growth (PEG) ratio of 0.36, when any number lower than 1 is the standard for an undervalued stock.
That’s why Palantir stock remains a buy.
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Danny Vena has positions in Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
Is Palantir Technologies Stock Headed to $100 Now That It’s Joined the S&P 500? 1 Wall Street Analyst Thinks So. was originally published by The Motley Fool
