Palantir (NASDAQ:PLTR) has become one of the most polarizing names on Wall Street. The stock’s jaw-dropping surge – soaring over 2,800% since January 2023 – has turned it into both a symbol of next-generation AI potential and a lightning rod for debate. For some, it’s a visionary data powerhouse reshaping how governments and enterprises make decisions; for others, it’s a case study in overblown hype and stretched valuations.
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That divide largely comes down to how investors interpret the numbers. The bears are fixated on PLTR’s sky-high valuations, which stand hundreds or even thousands of percent above sector medians. Meanwhile, the bulls point to the company’s rapid revenue expansion (Q2 reflected 48% year-over-year growth) and its impressive profitability metrics, including an astounding Rule of 40 score of 94.
This leads to the question: Is PLTR a value trap or a buying opportunity?
Top investor John Ballard believes the share price still has room to run, arguing that success in the private sector opens the door for significantly more growth going forward.
“The stellar performance of Palantir’s U.S. commercial business may justify its rich premium,” explains he 5-star investor, who is among the top 2% of stock pros covered by TipRanks.
While Ballard points out that the company does plenty of business with the U.S. government, Palantir has secured a steady and expanding foothold in the business community.
Not only is its customer pool increasing – 849 clients at the end of Q2 represented 43% year-over-year growth – its ability to integrate its software into customer operations has made it an “essential part” of these companies’ growth strategies. As evidence, Ballard notes that the company continues to upsell existing customers, who are increasing their engagement with Palantir at a fast clip.
“Palantir is showing it has the potential to scale into a much larger business in the next 10 years,” adds Ballard.
While PLTR’s share price is elevated, the investor argues that the premium is justified and that focusing on future growth turns the stock into a buying opportunity.
“Palantir, it appears, is still in the early stages of capturing a larger fraction of a massive addressable market. That makes opening a small position in the stock worth it,” sums up the investor. (To watch Ballard’s track record, click here)
However, Wall Street is not quite as ready to look past PLTR’s elevated valuation. With 13 Holds – to go along with 4 Buys and 2 Sells – PLTR carries a consensus Hold (i.e., Neutral) rating. Its 12-month average price target of $158.41 points to a downside of ~16%. (See PLTR stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.