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Palantir (PLTR) Rises 42% in 3 Months: Should You Buy the Stock?
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Shares of Palantir Technologies Inc. (PLTR - Free Report) have skyrocketed 42% in the past three months against the 3.7% decline of the industry and the 1.7% rise of the Zacks S&P 500 composite.
Three-Month Price Performance
Image Source: Zacks Investment Research
The stock hit a 52-week high of $31.2 during yesterday’s trading before closing a little lower at $29.38. It is trading well above its 50-day moving average, suggesting a bullish sentiment among investors. Interest in this prominent AI-focused stock remains strong as investors seek opportunities to capitalize on the trend.
Other noteworthy AI stocks have experienced significant gains, reflecting the overall positive sentiment in the market. NVIDIA (NVDA - Free Report) has gained 24.5%, International Business Machines (IBM - Free Report) has surged 13.4% and Oracle (ORCL - Free Report) has rallied 10.5% in the past three months.
Given the continued strength in PLTR shares, many investors might be having a fear of missing out (FOMO). But is this the right time to buy PLTR? Let’s find out.
AI Platform and Bootcamps: The Core of Palantir’s Growth
Palantir's AI solutions play a crucial role in enhancing defense capabilities, especially amid rising geopolitical tensions. This is evident from its recent $480 million U.S. defense contract for its AI system, Maven. The company maintains a balanced revenue stream, with 55% coming from government contracts and 45% from commercial ventures. Palantir's expertise in AI-driven information warfare and cybersecurity positions it well for sustained growth as global security demands evolve.
Palantir's Gotham platform secures multiyear contracts from governments, contributing to steady double-digit sales growth and predictable cash flow. The company's unique AI integrations and product launches have been particularly well-received by its core government clients and its expanding enterprise customer base. In the second quarter of 2024, Palantir's government revenues increased 23% year over year, with U.S. government revenues improving 24%.
A notable trend for Palantir is its successful pivot from relying almost entirely on government contracts to making significant inroads into Corporate America. The U.S. commercial division's performance has been impressive, driven by AI-powered operating systems and boot camps as its primary market strategies. In the second quarter of 2024, commercial revenues rose 33% year over year, with U.S. commercial revenues increasing 55%.
Strong Top and Bottom-Line Prospects
The Zacks Consensus Estimate for PLTR’s 2024 earnings is pegged at 36 cents, indicating 44% growth from the year-ago level. Earnings in 2025 are expected to increase 22.6% from the prior-year actuals.
Image Source: Zacks Investment Research
The company’s sales are expected to increase 24.3% and 21.4% year over year, respectively, in 2024 and 2025.
Image Source: Zacks Investment Research
Forget FOMO With PLTR
Palantir remains a fundamentally strong company with significant growth potential driven by its AI capabilities and strategic government and commercial contracts. The company’s strong financial performance, diversified revenue streams, and leadership in AI make it a solid investment choice for those looking to ride the wave of AI-driven innovation.
Image: Bigstock
Palantir (PLTR) Rises 42% in 3 Months: Should You Buy the Stock?
Shares of Palantir Technologies Inc. (PLTR - Free Report) have skyrocketed 42% in the past three months against the 3.7% decline of the industry and the 1.7% rise of the Zacks S&P 500 composite.
Three-Month Price Performance
The stock hit a 52-week high of $31.2 during yesterday’s trading before closing a little lower at $29.38. It is trading well above its 50-day moving average, suggesting a bullish sentiment among investors. Interest in this prominent AI-focused stock remains strong as investors seek opportunities to capitalize on the trend.
Other noteworthy AI stocks have experienced significant gains, reflecting the overall positive sentiment in the market. NVIDIA (NVDA - Free Report) has gained 24.5%, International Business Machines (IBM - Free Report) has surged 13.4% and Oracle (ORCL - Free Report) has rallied 10.5% in the past three months.
Given the continued strength in PLTR shares, many investors might be having a fear of missing out (FOMO). But is this the right time to buy PLTR? Let’s find out.
AI Platform and Bootcamps: The Core of Palantir’s Growth
Palantir's AI solutions play a crucial role in enhancing defense capabilities, especially amid rising geopolitical tensions. This is evident from its recent $480 million U.S. defense contract for its AI system, Maven. The company maintains a balanced revenue stream, with 55% coming from government contracts and 45% from commercial ventures. Palantir's expertise in AI-driven information warfare and cybersecurity positions it well for sustained growth as global security demands evolve.
Palantir's Gotham platform secures multiyear contracts from governments, contributing to steady double-digit sales growth and predictable cash flow. The company's unique AI integrations and product launches have been particularly well-received by its core government clients and its expanding enterprise customer base. In the second quarter of 2024, Palantir's government revenues increased 23% year over year, with U.S. government revenues improving 24%.
A notable trend for Palantir is its successful pivot from relying almost entirely on government contracts to making significant inroads into Corporate America. The U.S. commercial division's performance has been impressive, driven by AI-powered operating systems and boot camps as its primary market strategies. In the second quarter of 2024, commercial revenues rose 33% year over year, with U.S. commercial revenues increasing 55%.
Strong Top and Bottom-Line Prospects
The Zacks Consensus Estimate for PLTR’s 2024 earnings is pegged at 36 cents, indicating 44% growth from the year-ago level. Earnings in 2025 are expected to increase 22.6% from the prior-year actuals.
The company’s sales are expected to increase 24.3% and 21.4% year over year, respectively, in 2024 and 2025.
Forget FOMO With PLTR
Palantir remains a fundamentally strong company with significant growth potential driven by its AI capabilities and strategic government and commercial contracts. The company’s strong financial performance, diversified revenue streams, and leadership in AI make it a solid investment choice for those looking to ride the wave of AI-driven innovation.
PLTR currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.