Palantir Technologies Stock Soars: AI Advancements and Analyst Optimism Fuel Growth

Veteran analyst who forecast Palantir stocks rally makes surprising decision

Your attention, please: Alex Karp has something to say. The co-founder and CEO of Palantir Technologies (PLTR) recently appeared on HBO's Real Time with Bill Maher, where he extolled the virtues of living in America. Related: Palantir stock surges on huge S&P 500 decision "I was viewed as the Frankenstein monster," Karp said. "I don't come from wealth. And I get the opportunity to prove myself. No one in this country cares how crazy you are if you deliver." "The crowd went bananas," according to TheStreet Pro's Ed Ponsi, who watched the interview and wondered whether Karp was following in the footsteps of Tesla's (TSLA) Elon Musk and Apple's (AAPL) Steve Jobs to become the next rockstar CEO. "His interview was both mesmerizing and contradictory," Ponsi said. "The co-founder and CEO of Palantir put on a brilliant performance, even as he struggled to coherently explain what it is his company actually does. No matter. This was Karp's moment on the big stage." "Like Jimi Hendrix at Monterey or Bob Dylan at Newport, Karp has just entered the general public's consciousness," he added. Analyst 'on sidelines' with Palantir Ponsi noted that several years ago Karp made "a Bono-level proclamation" -- referring to the U2 frontman -- when he said that "we will be the most important software company in the world." "Now, everybody is catching on," Ponsi said. "Karp is becoming 'that weird software guy," even among folks who aren't focused on investing and trading." Related: Analysts respond to Palantir's entry into the S&P 500 Like Jobs and Musk, he said, Karp's products are revolutionary. "Like those rock stars before him, he now embodies his company," Ponsi said. "Jobs was Apple. Musk is Tesla. And now, for better or worse, Karp is Palantir." This has been quite a rocking time for Palantir, which went public in 2020 and has added more than $35 billion in market value over the past year. The artificial-intelligence-focused data-analytics company, which caters to commercial and government clients, is scheduled to join the S&P 500 on Sept. 23, replacing American Airlines. On Sept. 12 Citi analyst Tyler Radke affirmed his neutral rating on Palantir with a $30 price target after meeting with Chief Financial Officer Dave Glazer, according to The Fly. The company remains upbeat on its artificial intelligence platform momentum, with consistent macro commentary, Radke told investors in a research note. However, the analyst said the company's pending inclusion in the S&P 500 Index saw a 15% stock-price uptick, which increased Palantir's valuation to one of the most expensive names in software: a multiple of 25 times next 12 months' enterprise value to sales. Radke said that he was on the sidelines, noting that the company's effort to monetize its AI platform is still early. Bookings across commercial are strong while the government business is "lumpy" heading into the elections, the analyst said. More recently, on Sept. 17 Palantir announced a multiyear, multimillion-dollar contract for its AI platform with Nebraska Medicine to improve the quality of health care in the state through "transformational technologies." Analyst: Palantir 'is for my grandchildren' In less than a year of working with Palantir, Nebraska Medicine so far has implemented more than 10 AI-platform applications, improving patient throughput, expanding claims reimbursements and managing patient care. On the same day, Bank of America added Palantir to its US 1 list, the investment firm's compilation of the best U.S. investment ideas among those the firm covers. More AI Stocks: Analyst Mariana Perez Mora reiterated her buy rating and $50 price target on the shares. TheStreet Pro's Stephen Guilfoyle is a longtime supporter of Palantir. He told readers that the company's shares "kissed our $36 target price and backed off a bit, closing at $35.50" on Sept. 17. "Longtime readers know that unlike what you see on TV with my 'trader" colleagues (quotation marks intentional), one of my longstanding rules for myself is that I must act in some way when a target price gets taken out," he said. "Now, long term I don't yet want to wind down my long position in PLTR." Guilfoyle added. "This stock is for my children, grandchildren and the generations of Guilfoyles whom I will never meet. That does not mean that I am inert and unable to use my head to try to improve my own performance." The veteran trader said that "thanks to its recent moves and my additions on dips," Palantir is currently his fifth-largest single position in dollar terms and that he plans to cancel his $36 target price for now. "Remember, the worst two weeks of the year for stocks most years tend to straddle late September and early October," Guilfoyle said. "When the stock dips, and it will, I will be waiting with open arms to refill my top-five weighting." "Yes, trading in this way, recorded in [first-in-first-out] fashion, will increase net basis," he added. "So what? This game is about creating capital ... making money. Looking pretty is nice. Kicking tail is much nicer." Related: Veteran fund manager sees world of pain coming for stocks

Palantir Stock Is Skyrocketing. 1 Analyst Thinks It Has Another 38% Gain Ahead. | The Motley Fool

One analyst believes the high-flying AI company is still "misunderstood." The artificial intelligence revolution has been a mixed bag for software companies. While software stocks that harness the power of large language models (LLMs) have the potential to accelerate revenues, AI also gives software customers the potential to "do-it-yourself." For instance, private buy-now-pay-later company Klarna recently announced it would attempt to get rid of its Salesforce and Workday software in lieu of building its own CRM and employee management software internally, through the use of AI. Yet AI software platform Palantir (PLTR -0.19%) is showing an acceleration in its commercial business due to the advent of AI. And one Wall Street analyst thinks it has much farther to run. Some investors have equated Palantir with the meme stock revolution, leading to doubts about its recent run. This could be due to a few things. First, the stock has a high percentage of retail investors relative to institutional investors. Second, Palantir went public in a direct listing in late 2020, when interest rates were low and many dubious software and technology companies sold shares to the public. Finally, CEO Alex Karp is regarded as some as a quirky and outspoken leader, for better or worse. But Palantir is no meme stock. As a proof point, the company was recently admitted to the prestigious S&P 500 index, which has stringent criteria for admission. In the past couple years, Palantir has qualified for the index by posting consistent GAAP profitability -- somewhat rare for a software stock. In addition, Palantir has seen its revenue growth accelerate. That acceleration coincided with the introduction of the Palantir Artificial Intelligence Platform, or "AIP," about a year ago. AIP allows companies to incorporate third-party LLMs or other specialized models directly into Palantir's existing Gotham or Foundry software platforms. AIP has invigorated interest in Palantir's software, especially from commercial customers, resulting in a reacceleration of revenue growth since AIP was introduced. Normally, it's harder for companies to increase their growth rate as they get bigger because of the law of large numbers. However, one can see that Palantir has defied this trend. The introduction of AIP and Palantir fine-tuning its marketing strategy to include periodic, "boot camps," are likely reasons for the inflection. These boot camps allow prospective customers to bring their actual data and experience the AIP in a trial with Palantir's engineers. Currently, most of Wall Street is actually bearish on Palantir's stock. As of August, only six out of 18 analysts rate shares a Buy or Strong Buy, with another six rating shares Neutral and the remaining six rating shares a Sell. The average price target on shares is $27, below the $36 current price as of this writing. This is probably due to Palantir's stock having more than doubled this year, while currently trading at an expensive valuation of roughly 35 times sales. But one analyst, Mariana Perez Mora of Bank of America rates shares a Buy, with a street-high $50 price target on the stock. The analyst believes Wall Street misunderstands Palantir, and sees big things in the company's future, justifying a higher stock price. Mora thinks others miss how differentiated Palantir is relative to other enterprise software stocks, both product-wise and how Palantir goes to market. Of note, Palantir typically has members of its R&D team embed themselves with a customer first, in order to understand a customer's business problems and pain points. Then, Palantir tailors its modular software to that business' specific infrastructure, making its data analytics capabilities more relevant to each individual customer. In its annual report, Palantir notes seeks out "risky and resource-intensive" engagements where other competitors may shy away. Mora believes this method, which is more difficult upfront and where Palantir doesn't see immediate revenues, ultimately pays off. This is because the upfront work allows Palantir more pricing power later on. She then sees Palantir's products spreading to more industries as Palantir rolls out industry-specific platforms, such as the upcoming Warp Speed for manufacturing businesses. Whereas Palantir was formerly known as a specialized software platform for the Defense industry in the War on Terror, Mora sees Palantir becoming an industry-standard platform in the future, calling it, "the common data operational system for the U.S. government and large U.S. businesses." If Palantir's recent acceleration across commercial enterprises continues, she may very well end up being correct. With the majority of revenues still coming from the Defense industry, Palantir's recent penetration of the much larger enterprise market gives it the chance to keep growth rates high for a while, potentially justifying today's lofty stock price.