There’s plenty to argue about between bulls and bears Palantir Technologies (PLTR). Bulls point to improved profitability for PLTR stock. Bears focus on whether revenue growth will accelerate again for Palantir stock. Then there’s the buzz about artificial intelligence stocks to consider for the maker of data analytics software.
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Additionally, PLTR stock is up 75% through 2024. And Palantir stock is ranked No. 17 on the IBD 50 list of growth stocks.
Still, some investors may want to take profits.
Additionally, Palantir is one of the AI stocks to watch. With a rally on its second-quarter earnings report, Palantir stock climbed above 30 for the first time since February 2021. PLTR stock hit an intraday high of 45 on January 29, 2021.
Meanwhile, Q2 earnings for Palantir stock beat expectations, prompting analysts with a pessimistic view of Palantir stock to question its valuation.
Palantir Stock: AI Product Disaster
Palantir has already deployed AI capabilities with government customers for intelligence gathering, counterterrorism, and military purposes. Now, Palantir wants to use generative AI to drive growth in the commercial market.
The company continues to make progress on its Artificial Intelligence Platform, which first rolled out in early 2023. Palantir hosted its fourth AIP event on June 6.
At AIPCon4, Palantir said more than 70 customers showcased their prototypes for production-quality AI use cases through Palantir’s “bootcamps,” according to a Jefferies report. More than 1,300 AIP bootcamps have been completed since 2023, including 900 this year and nearly 500 since March.
Palantir has not disclosed pricing for any of its AI products, however. Some analysts say Palantir needs to make more progress with generative AI commercial implementations.
Additionally, Microsoft (MSFT) and Palantir have entered into an AI partnership.
PLTR Stock: Project Maven Extended
Still, Wall Street analysts don’t expect software makers to materially capitalize on generative AI, or “conversational AI,” before 2025. Here’s a look at the market for enterprise AI.
Meanwhile, the U.S. Army announced on May 29 that it has extended Palantir’s existing Maven Smart System (MSS) contract for five years. Palantir was an initial contractor for Project Maven, which launched in 2017.
Project Maven is part of the U.S. military’s effort to bring artificial intelligence to the battlefield. The Maven contract is worth about $90 million annually, one analyst estimated.
Palantir also announced that the Department of Defense Chief Digital and Artificial Intelligence Office (CDAO) has awarded it a contract that could be worth $480 million over 5 years
Meanwhile, Palantir shares fell after its quarterly earnings report, as analysts focused on growth in the U.S. commercial market amid the software maker’s weak international business.
There’s plenty for investors to think about when it comes to news. Oracle (ORCL) and Palantir have announced a cloud computing alliance.
In addition, Palantir has won a new $178 million contract from the U.S. Army for Project TITAN, a battlefield system that uses artificial intelligence.
In the meantime, here’s a look at Palantir’s international operations, including how AI is doing in Europe.
Palantir shares also rose 167% in 2023. The Nasdaq Composite rose 43%, while the S&P 500 rose 24%.
PLTR Stock Fundamentals
In 2023, Palantir announced a $1 billion buyback of PLTR shares. But as of Dec. 31, it had not purchased any shares.
Moreover, PLTR stock is trading well below the software maker’s intraday high of 45, which was reached in late January 2021.
Meanwhile, Palantir’s governance structure gives Karp and co-founder Peter Thiel long-term control over the company through super voting rights.
In addition, Palantir engineers often customize software to meet customer needs. That increases the time it takes to launch “digital transformation” projects. So after Palantir wins a contract, it can take a while before it starts generating revenue.
The Denver-based company offers three platforms. One is Palantir Gotham, which is used primarily by government agencies. There is Palantir Metropolis for banks, financial services firms and hedge funds. And Palantir Foundry is used by enterprise customers.
Palantir gets nearly 60% of its revenue from government agencies. Slowing revenue growth is a problem. In 2022, revenue growth slowed to 24% from 40% in 2021 and 47% in 2020. In 2023, revenue grew 17% year-over-year to $2.23 billion.
For the quarter ended March 31, Palantir’s profit under generally accepted accounting principles, or GAAP, was 8 cents per share, up 60% from a year earlier. Revenue rose 21% to $634 million.
Technical Analysis of Palantir Stock
Meanwhile, Palantir’s Relative Strength Rating stands at 97 out of a best possible 99.
Additionally, Palantir stock has a composite rating of 99 out of a possible 99, according to IBD Stock Check-up.
IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
PLTR shares have an Accumulation/Distribution Rating of B. That rating analyzes price and volume changes in a stock over the past 13 trading weeks. A+ represents heavy institutional buying; E represents heavy selling. Consider a C grade neutral.
As of August 12, Palantir is trading at a new entry point of 29.83, according to MarketSurge. Palantir stock is also trading just above a 5% buy zone.
Investors can sign up for news alerts from Palantir’s Investor Relations department here.
Also check out IBD Stock Lists and other IBD content to find dozens of other best stocks to buy or watch.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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