To The Moon

If we have been following the stock market, we could see that Artificial intelligence (AI) has dominated the tech landscape in 2024, with investors increasingly bullish on its transformative potential.

Major tech companies are also investing billions into the sector, driving remarkable growth and innovation.

One of the potential players is $Palantir Technologies Inc.(PLTR)$ who has come out as a standout leader in AI, which has shown a 47% rise in its stock year-to-date. 

In this article, I would like to discuss from fundamental as well as technical as whether Palantir can cross $35 by end of October 2024.

Robust Adoption Of AIP

Palantir’s platforms, including Palantir Foundry and the AI-powered Artificial Intelligence Platform (AIP), are renowned for their ability to convert vast and complex datasets into actionable insights.

Palantir’s AIP has shown robust customer adoption, enabling enterprises to move beyond basic applications and effectively deploy AI solutions. By integrating data analytics and machine learning, AIP helps customers convert unstructured data into structured insights, significantly differentiating Palantir from its competitors. 

Impressive Q2 Revenue

Palantir recent earning result has show that their revenue grew 27% YoY to $678 million, which signifies top-line potency. This is driven by the increasing adoption of its AIP platform.

U.S. commercial revenue increased by 55%, marking its growth beyond the government sector. Full-year revenue guidance raised to $2.742 billion to $2.750 billion.

These are bolstered by significant contracts like the $178 million Tactical Intelligence Targeting Access Node (TITAN) program with the U.S. Army.

Additionally, Palantir has demonstrated consistent profitability, with a GAAP net income of $134 million in the second quarter of 2024 and a GAAP operating income of $105 million. This is a significant improvement from the first quarter. 

The company’s robust cash flow, with $144 million from operations and $4.0 billion in cash reserves, provides substantial financial flexibility for future growth initiatives. 

Despite its high valuation, with a trailing P/E ratio of 235.02, Palantir’s premium is justified given its mission-critical software and expanding customer base.

The shift from semiconductor stocks to software stocks in the market has also favored Palantir, highlighting its strategic importance.

Key Factors That Could Help Palantir Reach $35

Continued Adoption and Expansion

The ongoing robust adoption of Palantir’s AI solutions, especially the AIP platform, will drive substantial revenue growth. If adoption rates continue to increase significantly, it could accelerate the stock price to rise to $35.

Government Contracts

Palantir’s expanding footprint in the government sector, highlighted by significant contracts such as the TITAN program, provided a stable and growing revenue base. Continued growth in this area will support the stock’s upward trajectory. The most recent is Palantir offering AI products on Microsoft Azure for U.S. Government Agencies.

Financial Performance

Maintaining strong profitability metrics and cash flow will enhance investor confidence. Achieving consistent revenue growth rates and high operating margins will be critical to reach $35 mark.

Market Trends

The broader market trend favoring AI and software companies will play a crucial role. As investors interest in these sectors remains high, Palantir’s stocks is likely to benefit.

Palantir Short Term In Multi-timeframe

If we were to look at Palantir in the short term from the technical, multi-timeframe actually presented an overall upside signal for Palantir.

So for the near term, we could be seeing Palantir making upside movement.

Palantir Price Target On Supertrend and Probability

I used the supertrend and probability to see what future price target we could be looking out, as shown in the chart below, the first target seem to be coming in at $33 to $34.

For longer term, if Palantir cross $35 mark, we could be seeing it hitting $40 and above.

In the longer term, this projection assumes continued robust adoption of Palantir’s AI Platform (AIP), with a 50% year-over-year growth rate, and sustained growth in government contracts, driven by projects like TITAN, at 8-10% annually.

Summary

In conclusion, Palantir Technologies stands out in the AI sector due to its innovative platforms, strong customer adoption, and significant government contracts. 

The financial strength and strategic importance of Palantir position it well for future growth. If current trends and adoption rates continue, Palantir’s stock price is projected to reach $35 by end of October 2024, with the potential for earlier achievement if market conditions remain favorable.

Appreciate if you could share your thoughts in the comment section whether you think Palantir could reach $35 by end of October 2024?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.