NYSE Stock Palantir stock has nearly doubled in a year – is it still a buy?

shares in this article

• Two quarters in a row in positive territory
• Palantir is working on a new platform for artificial intelligence
• The share has risen sharply in recent months

Another quarter in positive territory

Palantir, the US provider of software and services, ended the first quarter of fiscal 2023 in positive territory for the second straight quarter. However, earnings fell to $0.01 per share from $0.020 per share in the year-ago period. Analysts had previously estimated EPS at $0.040.

Revenue increased 18 percent to $525 million from $446.4 million in the same period last year. Palantir beat analyst estimates of $505.8 million.

“We were profitable again this quarter… And we now expect to be profitable each quarter through year-end,” said Alexander C. Karp, co-founder and CEO of Palantir Technologies Inc., in a letter to shareholders. “The intense engagement and demand for our new artificial intelligence (AIP) platform is unprecedented.”

New platform for artificial intelligence

In his letter to the shareholders, Palantir CEO Alexander C. Karp also wrote about a new platform for artificial intelligence that the company is developing and how great the commitment and demand for this artificial intelligence platform (AIP) is.

“We are currently mobilizing resources across the business, including our sales force, to translate that organic demand into expanded market presence,” said Karp. “AIP enables organizations in both the private and public sectors to leverage the power of Large Language Models within closed data environments.”

The first generation of the platform has been made available to selected customers since May. “We have already held numerous discussions with potential partners about the use of the software and are currently negotiating the conditions and prices for access to the modules of the platform,” Karp said in his letter in May.

According to Investor’s Business Daily (IBD), Bank of America stated in a recent note to clients, “The goal of AIP is to combine the machine learning technologies of existing PLTR technologies with large language models that coexist in current PLTR platforms and enable enterprises and… To help governments make more data-driven decisions and further streamline processes.”

Palantir stock in focus

The Palantir share was able to gain 68.08 percent on the NYSE stock exchange within a year and most recently cost 14.64 US dollars (as of June 21, 2023). Since the beginning of the year there has even been an increase of around 128 percent. Palantir is currently worth around 33.5 billion US dollars on the stock exchange.

But is it still worth investing in the Palantir share even after this high?

As reported by Investor’s Business Daily, Palantir’s stock has a Relative Strength Rating of 98 out of a best possible 99. The stock also has an IBD Composite Rating – which combines five separate proprietary ratings into one user-friendly rating – out of 99 out of the best possible, according to IBD Stock Checkup 99. Palantir stock also has an A+ accumulation/distribution rating, indicating strong institutional buying.

Palantir shares have been rated by twelve analysts on TipRanks over the past three months. Of these, two recommend buying the stock, six have issued a hold rating and four recommend selling the stock. The average 12-month price target for Palantir is $11.13, about 24 percent below the current price. The lowest price target is just $6, while the highest price target of $18 still gives Palantir about 23 percent upside potential.

Bulls and bears fight over Palantir

As Investor’s Business Daily reports, the bulls and bears are at odds over Palantir. While some pointed to improving stock profitability, others focused on slowing revenue growth. Palantir’s sales growth slowed from 47 percent in 2020 to 40 percent in 2021 and 24 percent in 2022.

In addition, there is currently increasing discussion about various stocks from the field of artificial intelligence that could be of interest to investors. These could also include Palantir: According to IBD, Palantir bulls point to software for artificial intelligence as a growth driver for the company.

On the other hand, some analysts would criticize Palantir’s strategic investments in Special Purpose Acquisition Companies (SPACs) as a way to increase revenue. “Management expects revenue from SPAC investment deals to be $17-19 million in the second quarter before declining significantly in the second half of 2023,” RBC analyst Rishi Jaluria quoted Investor’s Business Daily as saying capital. He added, “At least four clients with investment agreements have filed for Chapter 11 bankruptcy, with several others appearing to be heading in that direction.”

Meanwhile, Palantir has closed or expanded some partnerships. Among other things, Palantir recently expanded its partnership with Microsoft in the field of cloud computing and entered into a global partnership with IBM to accelerate the adoption of artificial intelligence software in companies. In addition, the company has gained importance in the healthcare market.

Palantir, meanwhile, has faced criticism for privacy issues due to the use of facial recognition technology on its platforms.

Editorial office finanzen.net

This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.

Image sources: Michael Vi / Shutterstock.com, albund / Shutterstock.com