Palantir's biggest stock-market bull ups the ante after 54% rally this year

By Emily Bary

Palantir is proving itself 'a clear leader in the AI arms race,' says Wedbush

Palantir Technologies Inc. appears to have impressed Wall Street once again with its artificial-intelligence momentum.

The software company recently held AIPCon 3, a conference focused on its Artificial Intelligence Platform, which is also known as AIP. Wedbush analyst Daniel Ives walked away with the sense that Palantir (PLTR) "has quickly established itself on the enterprise front as a clear leader in the AI arms race, with AIP front and center."

Ives boosted his price target on Palantir shares to $35 from $30, while keeping an outperform rating. His old target already was higher than any of the others on FactSet, and his new target implies a 29% upside from current levels.

Shares of Palantir were moving more than 2% higher in Friday morning trading. Through Thursday's close, the company's stock had risen 54% from its ending level of $17.17 on the last trading day of December 2023.

Palantir customers spoke at the conference about how they're using AIP, giving Ives the sense that the software is making those clients more productive. That sort of commentary is notable as Wall Street was somewhat divided last year about Palantir's ability to make money from AI in a reasonable timeframe.

The company "sits in an enviable position to monetize customers both on the enterprise as well as government segment," Ives wrote.

While the company showed AI spending momentum in its commercial business during the most recent quarter, Palantir's government business has been more sluggish. With that backdrop, Ives was encouraged by the company's recent $178 million Army contract win.

That deal "could now unleash a host of more government deals to ink over the coming year as [Palantir] becomes the solution to beat" in Washington, he said.

Brent Thill of Jefferies also took a positive view of the developments at AIPCon 3, including that Palantir announced more than 20 new customers and partners.

"We are constructive on the [go-to-market] momentum, which should further the [company's] efforts to move downmarket," or attract smaller customers, he said.

Still, Thill kept his hold rating and $22 price target on Palantir shares, saying his "biggest concern" is their valuation at about 18x times estimated revenue for calendar 2025. That multiple makes Palantir "the most expensive name in our coverage," he said.

-Emily Bary

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03-08-24 1035ET

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