Palantir's Q2 Earnings: A Pivotal Moment for Commercial Growth and AI Prospects

Palantir Faces Critical 'Prove Me' Moment: Analyst Says Commercial Growth Will Be 'Star Of The Show' - Palantir Technologies (NYSE:PLTR)

Ives calls Palantir the 'Messi of AI' and sets a $35 price target for the stock. In the world of artificial intelligence, few companies have generated as much buzz as Palantir Technologies Inc. PLTR. As the company prepares to release its Q2 earnings on Monday, all eyes are on how the company's ambitious AI strategies will play out in the competitive tech landscape. Wedbush Securities' analyst Daniel Ives has coined Palantir as the "Messi of AI," and he expects the company to deliver another robust performance. AIP - Palantir's Game-Changer Ives has maintained an Outperform rating on Palantir's stock, emphasizing its potential to leverage the AI boom effectively. He has set a 12-month price target of $35 for the stock, which is currently trading at $26.08. According to Ives, "As the AI Revolution goes through to hit the 2nd/3rd/4th derivatives, Palantir is in a prime position to capitalize on this spending wave with AIP front and center to monetize AI demand while continuing to build out use cases across industries." Palantir's Artificial Intelligence Platform (AIP) is expected to be at the heart of its growth strategy, catering to the ever-increasing AI demand. The company has been actively expanding its use cases, building a robust partner ecosystem, and enhancing its product offerings to tap into the enterprise-scale generative AI market. Palantir's US Commercial Growth & Government Deals Palantir's strength lies in its ability to drive significant growth in the U.S. commercial sector. Ives anticipates the company to surpass the critical 45% growth threshold in this segment, driven by "strong deal conversion." He stated, "We are expecting a headline beat with US commercial growth the star of the show that should exceed the key ~45% growth threshold on the heels of strong deal conversion." The company is also gearing up to accelerate government deals, targeting a key September federal quarter. As Ives noted, "The big focal points for the Street will be hearing about AIP pipeline conversion, continued momentum in U.S. commercial, and the acceleration of government deals into a key September federal quarter." Read Also: Should You Buy Palantir Ahead of Q2 Earnings Report? Palantir's Bootcamp Conversion Strategy: A Competitive Edge One of the pivotal strategies Palantir has employed is its bootcamp conversion strategy. This approach has not only shortened sales cycles but has also fast-tracked the signing of multi-year, multi-million-dollar contracts. Ives pointed out, "Boot Camp success will be a key data point to look for on the call. The company's boot camp conversion strategy continues to pay off with decelerating sales cycles and shortening conversion timelines." This bootcamp strategy is helping Palantir guide its clients in deploying products, optimizing workflows, and achieving operational results at industry-leading rates. It remains a key differentiator for Palantir as it strives to expand its market share during the ongoing AI revolution. Palantir's "Prove Me" Moment Despite Palantir's successes, the market remains cautious. The upcoming earnings call is seen as a critical "prove me" moment for the company, particularly concerning its commercial growth strategy. Ives acknowledged this skepticism, saying, "The Street remains highly skeptical of the Palantir commercial growth strategy and this quarter/data points from customers heading down the AIP path will be front and center for the Street as this June quarter is another 'prove me' moment for the Palantir story." Palantir's Positioning In The AI Market As Palantir gears up to report its earnings, investors and analysts alike will be closely watching how the company's AI strategies unfold. With a strong product portfolio and a clear focus on AI-driven growth, Palantir is well-positioned to capture a significant share of the burgeoning AI market. Ives' optimistic outlook reflects the potential for Palantir to emerge as a dominant force in the industry, just like Messi in the world of soccer. With an Outperform rating and a $35 price target, the stakes are high for Palantir to prove its mettle. The upcoming earnings release could be a game-changer, reaffirming Palantir's standing as the "Messi of AI." Read Next: Chip Stocks Staring At Another Bloodbath As Intel Tumbles, Nvidia Dips 4%, ASML Crumbles Over 6%: What's Ailing The Sector Friday Photo: World Economic Forum on Flickr and Shutterstock Market News and Data brought to you by Benzinga APIs

What You Need To Know Ahead of Palantir's Earnings Report

The company could provide investors with insights about the demand for its Artificial Intelligence Platform. Palantir Technologies (PLTR) is set to report second-quarter earnings after the closing bell on Monday with investors likely to be watching for commercial segment growth and updates about the demand for the data analytics company's artificial intelligence (AI) platform. Palantir's revenue is projected to be $653 million, according to estimates compiled by Visible Alpha, which would represent a more than 22% increase from the year-ago period. Net income is expected to be $94.83 million or 4 cents per share, an increase from the second quarter of 2023.

Palantir stock: Wall Street analyst issues a massive warning By Investing.com

Analysts at Monness, Crespi, and Hardt issued a massive warning to investors regarding Palantir stock ahead of the software maker's earnings report next week. Specifically, analysts warned the company's shares are trading at "an absurd valuation" fueled by a "19-month genAI propaganda cycle." "Based on our estimates, Palantir garners the richest valuation in our enterprise software group based on EV/revenue, while also claiming the top spot in our coverage universe at large," they noted. "Given the exorbitant number of shares outstanding, we believe it will take several years for Palantir to grow into its current valuation." While Monness analysts see Palantir Technologies Inc (NYSE:PLTR) as well-positioned to benefit from the AI trend and capitalize on volatile geopolitics in the long run, they consider the current valuation to be extreme. The brokerage firm points out several factors driving its bearish thesis, such as the pressured software sector, inconsistent revenue recognition from government-related contracts, and spotty execution. Notably, analysts believe "the darkest days of this economic quagmire are ahead of us." With respect to the upcoming earnings report, Monnes expects Palantir to meet their 2Q24 revenue estimate of $665.9 million and EPS forecast of $0.09, slightly above consensus estimates. Year-over-year revenue growth is expected to accelerate to 25% in 2Q24 from 21% in 1Q24 and 13% in 2Q23. They forecast an operating profit of $240.4 million, representing a 36.1% margin, up from 35.7% in 1Q24 and 25.3% in 2Q23. Government revenue is projected at $351.8 million and commercial sales at $314.1 million, with government segment growth accelerating to 17% in 2Q24 and commercial segment growth to 36%. "Palantir has experienced strong trends within its U.S. commercial business in recent quarters; however, this market is susceptible to the vicissitudes of the economy," analysts added. Palantir stock rose more than 51% in 2024, outperforming the broader market.