The latest developments in artificial intelligence (AI) have been making waves since early last year. The ability of these next-generation algorithms to create original content, streamline processes and increase productivity has businesses around the world racing to get their share of the resulting windfall.
One company uniquely positioned to benefit from this secular tailwind is Palantir Technologies (NYSE: PLTR). The company’s decades of experience developing AI helped it pivot and embrace the demand for generative AI, and that move has been a boon for Palantir and its shareholders. The stock has risen 477% since the start of 2023, fueled by the company’s improving results and growing opportunities.
The good news came fast and furious for Palantir this past week. With so much happening, investors may not have noticed all the recent developments. Here are four things Palantir investors may have missed this week.
1. Expanding the relationship with Nebraska Medicine
Palantir kicked off the week by announcing an expansion of its groundbreaking partnership with Nebraska Medicine to improve healthcare through AI, resulting in a new multi-year, multi-million dollar contract.
Nebraska Medicine is an early adopter of Palantir’s Artificial Intelligence Program (AIP) and has “implemented more than ten applications of AIP, improving patient throughput, expanding claims reimbursements, and better monitoring patient care.” It noted that AIP helped the health system develop a new workflow in less than six weeks, with additional breakthroughs in as little as 90 minutes.
One example is the improvements to Nebraska Medicine’s Discharge Lounge, which has seen a 2000%+ increase in utilization. This has reduced the time it takes to discharge patients by an average of one hour, freeing up bed space for other patients.
2. A strong vote of confidence
Analysts at Bank of America (BofA) Securities has added Palantir to the company’s U.S. 1 list. To make the list, a stock must be listed in the U.S., have a buy rating and be covered by the investment bank’s equity research analysts. The stock must also have an average daily trading volume of $5 million over the preceding six months. The list is intended to help BofA’s best investment ideas.
The analysts cited Palantir’s groundbreaking Warp-Speed platform, which is designed to integrate multiple aspects of manufacturing systems. It combines elements of enterprise resource planning (ERP), manufacturing execution systems (MES), product lifecycle management (PLM), programmable logic controllers (PLCs) for factory automation and even input from workers on the factory floor.
Analysts described it as “a tool that could transform the US industrial base,” leading to the instrument’s inclusion on the list.
3. Expansion of the Maven Smart System
Palantir announced that it has been awarded a contract by the DEVCOM Army Research Laboratory to expand its Maven Smart System to all branches of the military services, including the Army, Air Force, Space Force, Navy and U.S. Marine Corps. Maven is an AI-based targeting tool that is part of the National Geospatial-Intelligence Agency’s Maven AI framework. Palantir said it acts as the “connective tissue” between troops on the ground, battlefield sensors, hardware and software.
The fixed-price contract could be worth as much as $99.8 million over the next five years and will enhance the military services’ AI and machine learning capabilities.
4. Join the S&P 500
After all, Friday was the last trading day before Palantir joined the S&P 500The S&P is the most widely recognized benchmark in the country, consisting of the 500 largest companies in the U.S. As such, it is also considered the best gauge of overall stock market performance.
Palantir will be added to the prestigious index when the market opens on Monday, one of only 11 companies to join so far this year.
There are strict criteria for inclusion in the S&P 500, and Palantir passed with flying colors.
While this may seem trivial, Bank of America analyst Mariana Pérez Mora calls it a “watershed.” The analyst believes there’s a “fundamental misunderstanding” about Palantir, and adding it to the widely followed index will force institutional investors to rethink what they think they know about the AI pioneer. A better understanding of what Palantir does and the fundamental opportunity ahead could help clear up those misunderstandings, boost demand, and send the stock price even higher.
Therefore, the analyst maintains a Buy rating and a $50 price target on Palantir shares, representing a potential upside of 34%, despite the fact that it has already gained 477% since the beginning of last year.
Given the company’s direction, the enormous opportunity and the consistent execution by management, I expect the price target to be conservative.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Danny Vena has positions in Palantir Technologies. The Motley Fool has positions in and recommends Bank of America and Palantir Technologies. The Motley Fool has a disclosure policy.
4 Things Palantir Investors May Have Missed This Week was originally published by The Motley Fool
