Palantir’s Biggest Stock-market Bull Ups the Ante After a 54% Rally This Year

Palantir Technologies Inc. has once again left a favorable impression on Wall Street, showcasing its artificial intelligence (AI) prowess during AIPCon 3, a conference centered around its Artificial Intelligence Platform (AIP). This platform has positioned Palantir as a prominent player in the AI landscape, solidifying its status as a leader in the ongoing AI arms race, according to insights from Wedbush analyst Daniel Ives.

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Ives, acknowledging Palantir's growing influence, raised his price target for Palantir shares to $35, up from $30, while maintaining an outperform rating. Notably, his previous target already exceeded those of other analysts on FactSet, and the revised target suggests a substantial 29% upside from the current stock levels.

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The market responded positively to these developments, with Palantir's shares surging over 2% in Friday morning trading. As of Thursday's close, the company's stock had witnessed a remarkable 54% increase from its December 2023 ending level of $17.17.

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During AIPCon 3, Palantir's customers shared their experiences with the AI platform, emphasizing its role in enhancing productivity. This customer feedback is crucial, given the previous skepticism on Wall Street regarding Palantir's ability to generate profits from AI within a reasonable timeframe. Ives expressed confidence in Palantir's position, stating that the company is well-positioned to monetize customers in both the enterprise and government sectors.

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While Palantir exhibited momentum in AI spending within its commercial business in the latest quarter, its government business faced some sluggishness. However, Ives found encouragement in the recent $178 million Army contract win, anticipating that this deal could pave the way for additional government contracts in the coming year. He believes that Palantir could become the go-to solution in Washington, solidifying its standing as the preferred choice for government contracts.

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Brent Thill of Jefferies also echoed positive sentiments regarding the developments at AIPCon 3. He highlighted Palantir's announcement of over 20 new customers and partners, expressing optimism about the go-to-market momentum that could aid the company in attracting smaller customers.

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Despite the positive outlook, Thill opted to maintain his hold rating and $22 price target on Palantir shares. His primary concern revolves around the company's valuation, which stands at approximately 18 times estimated revenue for calendar 2025. According to Thill, this multiple makes Palantir the most expensive name in their coverage, signaling a cautious approach toward the company's current valuation.

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