Over the past three months, Palantir Technologies Inc. (PLTR) has witnessed an astonishing 42% surge, outshining the 3.7% decline in the technology services industry and the 1.7% rise of the Zacks S&P 500 composite.
A Bullish Run: Three-Month Price Performance
Palantir saw its stock hit a 52-week pinnacle of $31.2 during recent trading, settling slightly lower at $29.38 by session close. Surpassing its 50-day moving average, there’s a prevalent bullish sentiment among investors gravitating towards this beacon in the investing galaxy.
Noteworthy contemporaries in the realm of artificial intelligence (AI) such as NVIDIA (NVDA), International Business Machines (IBM), and Oracle (ORCL) reaped substantial gains, reflecting the overall optimism permeating the market.
Given this stellar trajectory, it’s natural for many investors to feel the pangs of FOMO (fear of missing out). The question remains – is this the opportune moment to acquire PLTR shares?
The AI Odyssey: Palantir’s Growth Trajectory
Palantir’s stronghold in AI solutions is a linchpin in fortifying defense capabilities, particularly amidst heightening global tensions. Testament to its prowess is the recent $480 million U.S. defense deal inked for its AI system, Maven.
This innovative entity boasts a stable revenue mix, with 55% stemming from government contracts and the remaining 45% from commercial ventures. A juggernaut in AI-driven information warfare and cybersecurity, Palantir is strategically positioned to capitalize on evolving global security demands.
Proffering Palantir’s Gotham platform heralded numerous multiyear government contracts, contributing to sustained double-digit sales escalation and predictable cash inflows. Its avant-garde AI integrations and product launches have been warmly received by the core government clientele and the burgeoning enterprise base. In the second quarter of 2024, Palantir witnessed a 23% year-over-year spike in government revenues, with U.S. government revenues soaring by 24%.
An intriguing shift in Palantir’s trajectory has been its successful pivot from an overreliance on government contracts to substantial inroads within Corporate America. The commendable performance of its U.S. commercial sector is driven by AI-powered operating systems and boot camps as primary market strategies. Commercial revenues surged by 33% year over year in the second quarter of 2024, with U.S. commercial revenues scaling by 55%.
Stellar Growth Projections
The Zacks Consensus Estimate pins PLTR’s 2024 earnings at 36 cents, signifying a robust 44% uptick from the prior year. Earnings in 2025 are anticipated to swell by 22.6% from the preceding year’s actuals.
Forecasts portend a 24.3% and 21.4% year-on-year surge in sales for 2024 and 2025, respectively.
Embrace the Palantir Wave
Palantir stands as a bedrock of strength with substantial growth vistas propelled by its AI acumen and strategic government and commercial collaborations. Its robust financial performance, diversified revenue streams, and AI leadership render it an enticing avenue for investors aiming to ride the crest of AI-fueled innovation.
PLTR currently holds a Zacks Rank #2 (Buy).