Several companies have leveraged the AI boom to deliver strong returns to investors this year, and Palantir (NYSE:PLTR) stands out among them. The big data specialist’s shares have surged by 67% year-to-date, significantly outperforming the NASDAQ’s 19% gain.
However, some on the Street believe that AI hype has been a major driver of these returns, rather than Palantir’s sound positioning in the AI game. Wedbush analyst Daniel Ives, the Street’s biggest PLTR bull, strongly disagrees with this view.
“We believe that PLTR is well-positioned to continue capitalizing on this $1 trillion AI spending wave with more use cases coming forward to address critical problems across industries and empower data-driven decision-making,” Ives says.
Palantir has seen a surge in demand from both commercial and government sectors. Customers are accelerating their AI strategies beyond chat applications, leveraging Palantir’s technology to enhance efficiencies and achieve operational benefits. The company has conducted over 1,300 bootcamps, with more than 500 in the past three months alone, demonstrating to users how to implement this technology and realize tangible value in real-time. These workshops are a key component of Palantir’s growth strategy.
While the different platforms that make up Palantir’s portfolio all have “specific focuses and capabilities,” and are seeing robust demand, it is the AIP (Artificial Intelligence Platform) that continues to be the primary driver in both the commercial and government sectors, serving as the main method through which the company attracts and retains customers.
And that is something recognized by Ives. “AIP has been the backbone of this massive opportunity for the company with a significant number of organizations signing long-term deals that have meaningful impacts on operations as more companies realize AIP’s potential to drive value by doing more for enterprise transformations at a faster pace,” the analyst explained.
So, ultimately, what does it all mean for investors? Ives rates PLTR shares an Outperform (i.e., Buy), along with a Street-high price target of $35. That figure offers a potential upside of 22% from current levels.
The rest of the Street, however, has a far more cautious stance. Based on a mix of 6 Holds, 4 Sells, and 3 Buys, the analyst consensus rates the stock a Hold (i.e. Neutral). Moreover, the $22.55 average price target suggests shares are overvalued by ~21%. (See Palantir stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
