Palantir Technologies (NASDAQ:PLTR) has emerged as a top-performing tech stock in 2024, showcasing impressive growth of 42.9% year-to-date and a staggering 211% over the past 12 months. With a market cap of $55.3 billion, Palantir specializes in developing and deploying software platforms that aid clients in counterterrorism efforts and operations globally.
The company’s flagship product, Palantir Gotham, enables users to uncover hidden patterns within datasets, empowering them to devise and implement real-world responses to threats. On the commercial front, Palantir Foundry serves as a central operating system for companies, facilitating the integration and analysis of data in a unified platform. Additionally, the Palantir Artificial Intelligence Platform (AIP) provides access to commercial large language models (LLMs), simplifying and transforming data sets.
The surge in Palantir’s stock can be attributed to its strong Q4 performance in 2023, where it exceeded revenue expectations, reporting $608.4 million, a 20% year-over-year increase. Moreover, the company’s adjusted earnings of $0.08 per share met analyst expectations. CEO Alex Karp highlighted robust demand for Palantir’s AI-powered products, particularly the AIP, which is being adopted by enterprises at a rapid pace.
Palantir’s commercial sales experienced a significant uptick in Q4, soaring by 70%, with the customer count increasing by 55% to 221. The company expects U.S. commercial sales to reach $640 million in 2024, up from $457 million in 2023, reflecting a 40% increase. Palantir’s focus on profitability is evident from its consistent profits, marking its fifth consecutive profitable quarter in Q4.
Analysts foresee Palantir’s adjusted earnings per share to rise from $0.25 in 2023 to $0.33 in 2024, translating to a forward earnings multiple of 75x, indicating a premium valuation. The average target price for Palantir stock among Wall Street analysts is $20.67, with Wedbush analyst Dan Ives setting a new Street-high target price of $35, citing the company’s position to capitalize on the surge in enterprise spending in the tech sector. However, the overall sentiment among analysts remains mixed, with a varying range of recommendations from “strong buy” to “sell.”
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Author Stephanie Bédard-Châteauneuf 
