PLTR Will Rise 200% ! Wall St Analyst's Bold Claim.
My internal radar was on “alert” mode, when I came across the post about $Palantir Technologies Inc.(PLTR)$ ‘future’ market cap. (see below)
My cynical self is concerned that it is an entrapment of sort by the wolves of Wall Street.
Still, I read it and decide for myself how many ounces of ‘truth’ could be unearthed.
What I have learnt is never leave any post/s un-read especially when it about stock/s in your holdings.
You owe yourself to find out and be grateful when you learn something new in the process.
Without a doubt, PLTR is one of the hottest stocks on the market in recent months.
As of 10 Dec 2024, shares have advanced +327.56% YTD, due to enthusiasm surrounding artificial intelligence (AI).
This makes PLTR the best-performing member of S&P 500 in 2024.
PLTR is currently valued at $161.42 billion.
However, Wedbush’s analyst, Dan Ives believes that Palantir could be the next $Oracle(ORCL)$.
Had Dan used a trendier company (than Oracle) in his comparison, it would have generated more buzz. What’s more Oracle stock price has fallen by -7% after announcing its less than stellar quarterly earnings on 09 Dec 2024.
Still, the implications are still enormous for shareholders.
Why Oracle ?
Oracle is a $500 billion company (200% more than Palantir), with a strong presence in several enterprise-software verticals, including analytics and business intelligence platforms.
Realistically, Ives does not expect PLTR shares to surge +200% in the next 12 months.
Instead, he thinks the company can grow into that valuation over the next 3 to 4 years.
What makes that call surprising is that most pundits are still skeptical about Palantir.
Among the 20 analysts tracking PLTR, it has a median target price of $38 per share.
This implies -50.22% downside from Fri, 06 Dec 2024 closing price of $76.34 (its recent peak).
Must Know.
Palantir has become one of the largest players in the AI platforms market.
It has helped commercial and government organizations make sense of complex data.
Its core products - Gotham and Foundry, let clients integrate information and machine learning (ML) models into analytical applications.
Its AI platform AIP adds support for large language models (LLMs) and generative AI to its core software products.
In August 2024, Forrester Research recognized PLTR as a leader in AI/ML platforms. (see above)
The Q3 2024 Forrester Wave™: AI/ML Platforms, reported PLTR has achieved the highest ranking for current offering.
Shortly in September 2024, Dresner Advisory Services listed Palantir as a top vendor in its 2024 market study on AI/ML and data science software.
[Side track]
Dresner Advisory Services:
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Is a highly reputed and trusted research and advisory firm specializing in business intelligence (BI) and related fields.
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Their research is often cited by industry publications and vendors, and their methodology is considered to be rigorous and unbiased.
With 2 accolades under its belt, that puts PLTR in a good position.
According to International Data Corp. (IDC), a global market intelligence firm — estimates that AI platform spending will increase at 41% annually through 2028.
Meanwhile, Grand View Research expects the data-analytics software market to grow at 27% annually through 2030.
What Else ?
Quarterly Earnings.
Palantir checked all the right boxes with its Q3 financial report.
The company has (1) beaten expectations, (2) raised full-year guidance, and (3) provided encouraging insight into the business.
Revenue: has grown by +30% YoY to $725 million.
This would be PLTR’s 5th consecutive acceleration. (see above)
Net income (non-GAAP): has soared +43% to $0.10 per diluted share.
Particularly important was PLTR’s amazing sales growth of +40% among US government customers, an acceleration from 24% in Q2 and 12% in Q1 respectively.
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CFO Dave Glazer attributed the uptick to new contract awards that reflect growing demand for AI in government software.
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In September 2024, PLTR won a $100 million contract that will expand its Maven Smart System for battlespace awareness to more US military personnel. (see above)
Q4 & FY 2024 Outlook.
For FY 2024, management expects full-year revenue to increase +26%, that is 3% points faster than the company’s previous forecast.
However, that implies revenue will only need to grow 26% in Q4 2024, that is slower than the 30% growth in Q3 2024.
Would PLTR slowdown in Q4 2024; just for the sake of slowing down?
Summary.
PLTR should continue to do well as more businesses & governments use AI to work smarter. However it’s high valuation remains worrisome.
Analysts expects PLTR's earnings to grow faster (at 25% annually until 2027). in order to ‘justify’ its current expensive price-to-earnings (P/E) ratio of “205”.
Many experts say Palantir is overpriced compared to other software companies.
Wedbush analyst Dan Ives :
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Thinks, Wall Street underestimate how much Palantir will benefit as demand for AI software increases.
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He estimated PLTR’s earnings could grow 15% - 20% faster than other analysts’ anticipations.
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While unconcerned with PLTR’s current valuation, he sees very little near-term upside.
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Although declaring (a) PLTR may be the next Oracle and (b) "probably” the best pure play AI — his 12-month target price for PLTR is only $75, implying a -1.76% downside to Fri, 06 Dec 2024 price of $76.34.
My viewpoints: (mine only)
Tiprank's rating of Dan Ives
Before sharing my thoughts on Palantir, I did a background check on Dan Ives, the Wedbush analyst who claimed PLTR’s +200% rise.
Looks like he is an average analyst whose success rate and average returns are just run of the mills.
I will continue to read what he has to say in the future but with a tinge of salt.
Ok - Palantir.
I always believed PLTR to be a slow burner stock for medium to long term play.
Its sudden surge from September 2024 onwards, took me by surprise too.
I supposed being selected to be included in the S&P 500 index has its wider implications and advantages.
Barely 2 months later, PLTR made another announcement that it will relist on the Nasdaq index.
This time, I have posted about the benefits that will come with the migration. Click here ! to read the details.
I strongly believe PLTR’s current run is due mainly to it being included in Nasdaq since 26 Nov 2024.
More importantly, everyone is waiting “impatiently” to find out if PLTR will be included in the refreshed Nasdaq-100 index.
All shall be revealed on Fri, 13 Dec 2024.
TWO Possible Outcome: Which do you believe will come to pass ?
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PLTR is not included in Nasdaq-100. Its stock price may fall, by how much, it’s hard to tell.
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PLTR is included in Nasdaq-100. Its stock price may further skyrocket as covered in my 16 Nov 2024 post. By how much, it’s hard to tell too.
Latest Updates - Business Contracts.
Hypothetically even if PLTR did not get included in the Nasdaq-100 this time round, its books will continue to gain strength from NEW multi-million dollars projects that are coming on stream and will be keeping the company occupied in the next few years. (see below)
On Fri, 06 Dec 2024, Palantir and Anduril, announced a new partnership aimed at combining some of their respective platforms for National Security use cases, as the US military pursues a sweeping array of new AI tools.
The teaming initiative, which the companies are calling a “consortium,” is emerging as the firms separately continue to rack up big contract wins with the Pentagon.
With a new government setting up shop next month, could be a further boon for Palantir and Anduril, especially if it leads to an increase in defense spending for military modernization efforts.
On the same Fri, 06 Dec 2024, $Booz Allen Hamilton(BAH)$ and Palantir announced a partnership aimed at enhancing US defense capabilities.
The collaboration focuses on two key areas: (1) transformational information infrastructure modernization and (2) accelerating integrated warfighting operations with coalition partners.
This collaboration is intended to address the urgent National Security challenges faced by the US and its allies.
On the same Friday, both Shield AI & Palantir join forces to deliver large-scale autonomous command and control for uncrewed aircraft.
The integration blends Shield AI’s Hivemind autonomy with Palantir’s intelligence platforms, aiming to operate even without GPS or comms. This is really cutting edge !
Shield AI will adopt Palantir's new Warp Speed manufacturing operating system to accelerate production and delivery of autonomous systems.
On 9 Dec 2024, PLTR has expanded its contract with the US Special Operations Command (USSOCOM) in a one-year delivery valued at $36.8 million.
PLTR will be the lead software integrator for USSOCOM's Mission Command System, implementing its Mission Manager solution for the first time in United States special operations forces (SOF) Units
If you are risk-averse, avoid PLTR for now. If you are a risk taker, you could bet on PLTR’s inclusion in Nasdaq-100. Standing in front of a fork-road, what will you do ? Be Honest !
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Do you think PLTR will be included in the Nasdaq-100 index, why ?
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Do you think PLTR will be excluded from the Nasdaq-100 index this time round, why ?
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despite the micro fundamental news, the price action is too high right now, would prefer a correction to find a good entry for $Palantir Technologies Inc.(PLTR)$ 😆
Thank you for sharing. How do you currently view the technical aspect
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