Palantir (PLTR) has reached a major milestone, as it is now officially one of the 20 most valuable companies in the U.S. Indeed, the software and data analytics provider, known for its work with defense agencies, saw its stock climb more than 2% on Friday to a new record high. This rally boosted its market value to $375 billion, which placed it ahead of giants like Home Depot (HD), Procter & Gamble (PG), Bank of America (BAC), and Coca-Cola (KO).
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The company’s rise has been driven by investor hype around artificial intelligence and its deep ties to the U.S. government. Since being founded in 2003 by Peter Thiel, CEO Alex Karp, and others, Palantir has steadily grown its customer base. As a result, in its most recent quarter, revenue from U.S. government contracts jumped by 45% to $373 million, which helped total sales grow 39% to $884 million.
However, even with this growth, Palantir’s valuation is extremely high. In fact, the stock currently trades at 273 times forward earnings, far above most companies. It is also worth noting that Palantir generates significantly less revenue than Mastercard (MA), which is the next smallest company by sales in the top 20. For reference, Palantir brought in $3.1 billion in revenue over the past year while Mastercard generated about $29 billion. This shows how much investors are betting on Palantir’s future growth rather than its current operation.
Is PLTR Stock a Buy?
Turning to Wall Street, analysts have a Hold consensus rating on PLTR stock based on four Buys, 10 Holds, and three Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average PLTR price target of $109.50 per share implies 31.1% downside risk.
