Shares of Palantir Technologies (PLTR) surged 31% on Tuesday following the company’s announcement of fourth-quarter earnings that exceeded expectations, largely due to a spike in commercial demand for its artificial intelligence platform (AIP).
Analysts have adjusted their price targets for Palantir upwards in light of its fourth-quarter performance and the potential for growth within its AIP sector. Despite this, there are lingering questions about Palantir’s ability to maintain this growth rate.
On Tuesday, Palantir’s stock increased by $5.14, closing at $21.86, after reaching a high of $22.18 during the day. Over the past year, the stock has risen approximately 160%. Bank of America analysts have increased their price target for Palantir to $24 from $21, emphasizing that Palantir’s AIP is at an early stage but is already making a significant impact.
They highlighted the AIP’s growth in the fourth quarter as evidence of Palantir’s distinct role in facilitating AI-enhanced data-driven decision-making in a practical, accessible, and operational manner.
Wedbush raised its price target for Palantir to $30 from $25, citing the company’s exceptional initial success with its AIP. Wedbush analysts likened Palantir to “the Messi of AI,” stating that occasionally, a technology company emerges that significantly outpaces its competitors and is positioned for future growth, yet is often underestimated at the time.
Palantir was compared to major companies like Nvidia (NVDA) and Microsoft (MSFT) as being in a similar category of leading the industry.
However, some analysts expressed concerns about the long-term sustainability of growth in Palantir’s AIP sector and the overall valuation of the company.
Jefferies upgraded Palantir to “hold” and increased its price target to $22, recognizing the AIP’s faster-than-anticipated growth. Nonetheless, they remained cautious due to valuation concerns, questioning whether Palantir could continue its momentum after a strong fourth quarter. They pointed out that forward-looking indicators had been weak in the first three quarters (down by more than 20%), and government revenue growth was slowing.
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