There’s plenty for bulls and bears to hash out over Palantir Technologies (PLTR). Bulls point to improved profitability for PLTR stock. Bears focus on whether revenue growth will reaccelerate for Palantir stock. Then, there’s buzz over artificial intelligence stocks to consider for the maker of data analytics software.
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Also, PLTR stock has advanced 101% in 2024. And, Palantir stock ranks No. 10 on the IBD 50 roster of growth stocks.
Meanwhile, Palantir will join the S&P 500 index before the open on Sept. 23. The inclusion will enable mutual funs and institutional investors to buy PLTR stock. Bank of America hiked its price target on Palantir stock to 50 from 30 amid the S&P 500 index inclusion.
“This was a moment that PLTR investors have been anxiously waiting for over the past year as the profitability profile of this story has significantly been bolstered with this another validation moment for the Palantir story,” said Wedbush analyst Daniel Ives in a report. “Getting added to the S&P 500 Index is an important moment in the Palantir story that we believe marks a new era of enterprise growth and profitability.”
In addition, Palantir is among AI stocks to watch. According to research firm Forrester, Palantir ranks among the leading AI platforms.
Further, Palantir in August hired Mike Gallagher, a former Wisconsin congressman, as head of its defense business.
Meanwhile, Q2 earnings for Palantir stock topped expectations. Analysts with bearish views on Palantir stock continued to question its valuation.
However, IBD doesn’t put much weight on P/E ratios and other valuation metrics. On the other hand, here are some time-tested trading rules.
In a rare interview, Palantir Chief Executive Alex Karp talked about AI, America’s future and other topics.
Palantir Stock: AI Product Ramp
Palantir has already mined the AI opportunity with government customers for intelligence gathering, counterterrorism and military purposes. Now Palantir aims to use generative AI to spur growth in the commercial market.
The company continues to make progress with its “Artificial Intelligence Platform,” initially rolled out in early 2023. Palantir hosted its fourth AIP event on June 6.
At AIPCon4, Palantir said over 70 customers presented their prototype to production-grade AI use cases via Palantir’s “bootcamps,” said a Jefferies report. More than 1,300 AIP bootcamps have been completed since 2023, including 900 this year and nearly 500 since March.
However, Palantir has not disclosed pricing for AI products. Some analysts say Palantir needs to show more progress with generative AI commercial deployments.
Additionally, Microsoft (MSFT) and Palantir forged an AI partnership.
PLTR Stock: Project Maven Extended
Still, Wall Street analysts now do not expect software makers to monetize generative AI, or “conversational AI,” in a material way until 2025. Here’s a look at the enterprise AI market.
Meanwhile, the U.S. Army on May 29 announced that it has extended Palantir’s existing Maven Smart System (MSS) contract for five years. Palantir was one of the early contractors for Project Maven, launched in 2017.
Project Maven is part of the U.S. Army’s effort to bring artificial intelligence to the battlefield. The Maven contract brings in about $90 million annually, one analyst estimated.
Also, Palantir announced that the Department of Defense Chief Digital and Artificial Intelligence Office (CDAO) awarded a contract that could be worth $480 million over a 5-year period
On the news front, there’s plenty for investors to mull. Oracle (ORCL) and Palantir announced a cloud computing alliance.
In addition, Palantir has won a new, $178 million U.S. Army contract for project TITAN, a battlefield system using artificial intelligence.
Meanwhile, here’s a look at Palantir’s international business, including how AI is doing in Europe.
Also, Palantir stock jumped 167% in 2023. The Nasdaq composite climbed 43% while the S&P 500 rose 24%.
PLTR Stock Fundamentals
In addition, PLTR stock trades well below the software maker’s all-time intraday high of 45 set in late January 2021.
The Denver-based company offers three platforms. One is Palantir Gotham, used primarily by government agencies. There’s Palantir Metropolis for banks, financial services firms and hedge funds. And Palantir Foundry is used by corporate clients.
Palantir gets nearly 60% of its revenue from government agencies. Decelerating revenue growth is an issue. In 2022, revenue growth slowed to 24% from 40% in 2021 and 47% in 2020. In 2023, revenue grew 17% year-over-year to $2.23 billion.
Palantir Stock Technical Analysis
Meanwhile, Palantir’s Relative Strength Rating stands at 98 out of a best-possible 99.
Also, Palantir stock holds a Composite Rating of 99 out of a best-possible 99, according to IBD Stock Check-up.
IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
PLTR stock holds an Accumulation/Distribution Rating of A-minus. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.
As of Sept. 10, Palantir holds an entry point of 29.83, according to MarketSurge. Also, Palantir stock trades well above a 5% buy zone.
Some investors may want to take profits.
Investors can sign up for news alerts from Palantir investor relations department here.
Further, check out IBD Stock Lists and other IBD content to find dozens more of the best stocks to buy or watch.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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