Another month, another bullish initiative for Palantir Technologies (NASDAQ:PLTR). This time around, Palantir is partnering on the “Warp Speed for Warships” program that seeks to support the acceleration of shipbuilding for the U.S. Navy.
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Palantir has no shortage of high-profile clients, and the U.S. security sector is one of the big ones. While PLTR’s share price was knocked down a few pegs earlier this year when news broke that the Trump administration was looking to trim 8% off its annual defense budget, these worries appear to have subsided.
All told, PLTR’s share price has risen some 97% year-to-date, and more than 400% since the start of last year. Despite expressing concern regarding the company’s “nose-bleed valuation,” top investor Nauman Khan thinks that the growth will likely be continuing.
“Valuation remains extremely high, but Palantir’s unmatched momentum, government ties, and accelerating growth justify continued optimism,” explains the 5-star investor, who is among the top 4% of TipRanks’ stock pros.
Khan admits that it is stating the obvious to describe Palantir as “riding a powerful wave of momentum,” with the Warp Speed project yet another indication of the company’s integral role in the U.S. defense ecosystem.
“Palantir’s unmatched position in government analytics and its new Warp Speed program give us confidence that continued expansion in both defense and commercial markets should power earnings higher,” the investor adds.
Indeed, the investor is encouraged by Palantir’s strategy of embedding its Foundry and AIP suites into the core of client operations, creating a “moat that is practically impregnable.”
Nevertheless, Khan reminds investors that the valuation remains extremely rich, and far and away beyond those of its peers. This could mean that even small missteps could lead to major downgrades up ahead.
Khan will be sticking with Palantir for the time being, though he cautions investors to “stay vigilant” for any potential hiccups that could lead to shifting sands.
“Palantir trades at a premium, and any near‑term miss could trigger a re‑rating, but for now, I am sticking with ‘Buy,’” concludes Khan. (To watch Nauman Khan’s track record, click here)
Wall Street, on the other hand, would rather error on the side of caution – as its 10 Hold ratings far outweigh 3 Buys and 3 Sells. This gives PLTR a consensus Hold (i.e. Neutral) rating, and its 12-month average price target of $104.85 has a downside approaching 30% in the year ahead. (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.