The stock of Palantir Technologies (NYSE: PLTR) has demonstrated significant price growth in the past year, with its securities more than tripling in value. However, attributing this success solely to “AI hype” would be shortsighted. The impact of exaggerated hype far surpasses the genuine catalysts driving advancements in this AI-focused company.
Palantir is strategically leveraging the increasing demand for AI enterprise software in the business sector, with potential opportunities for expansion into government sectors as well. The company is poised for substantial revenue and earnings growth, indicating a promising outlook.
PLTR Stock: Riding the AI Wave
Recent discussions have underscored the pivotal role played by AI in propelling PLTR’s upward trajectory. Notably, the latest financial results from Palantir highlight the significant boost in commercial revenue, which surged by 70% year over year in the quarter ending on December 31, 2023. The company also witnessed a 55% increase in customer count year over year, and a 22% rise on a sequential basis.
These outcomes clearly demonstrate the tangible progress achieved through Palantir’s utilization of its Artificial Intelligence Platform.
Unlike other AI firms, Palantir has a distinct advantage in this regard. Following the AIPCon event, Wedbush’s Dan Ives raised the stock price target for PLTR from \(30 to \)35 per share. This move was driven by the anticipation of a substantial uptick in business expenditure facilitated by the AIP Platforms and related components.
While the government sector’s growth was relatively slower in the next quarter, with government revenues increasing by 5% sequentially and 11% year over year, there are indications of potential growth in this segment as well.
Unveiling Additional Growth Drivers
Despite the current focus on business expansion, Palantir’s government segment remains a significant contributor to the company’s overall growth trajectory. Recent agreements, such as the lucrative $78.4 million deal with the United States Army, highlight the company’s continued benefit from the increasing adoption of AI and machine learning in modern warfare.
Moreover, political factors may also be influencing PLTR’s price surge. The escalating political tensions could potentially spur increased defense spending, benefiting companies like Palantir positioned to cater to such demands.
Industry analysts like HSBC’s Stephen Bersey foresee a notable uptick in Palantir’s overall growth in the coming years, projecting a 24% earnings increase by 2028.
Key Takeaways for PLTR Stock
Palantir seems well-positioned to sustain its high-growth trajectory, supported by a robust sales resurgence and the potential for political catalysts to further drive growth.
While some stocks may be riding the wave of AI trends, companies like Palantir, Nvidia (NASDAQ: NVDA), and Microsoft (NASDAQ: MSFT) are not only capitalizing on the AI trend but also demonstrating tangible results and growth potential.
Consider adding PLTR to your investment portfolio alongside these successful AI players.
In Portfolio Grader, PLTR investment is rated A. Louis Navellier held positions in PLTR, NVDA, and MSFT at the time of release. The InvestorPlace Research Staff did not hold any positions in the securities mentioned in this article.
