Several companies have capitalized on the AI boom this year to generate strong returns for investors. Palantir (NYSE:PLTR) One group that stands out is the stock prices of big data companies, which have risen 67% since the beginning of the year, far outpacing the Nasdaq’s 19% increase.
But some on Wall Street believe that AI hype is a big driver of these returns, not Palantir’s healthy positioning in the AI industry. Wedbush analyst Daniel Ives, Wall Street’s biggest PLTR bull, strongly disagrees.
“We believe PLTR is well positioned to continue to capitalize on this trillion-dollar wave of AI spending as more use cases emerge to address critical problems across industries and enhance data-driven decision-making,” Ives said.
Palantir has seen a surge in demand from both the commercial and government sectors. Customers are accelerating their AI strategies beyond chat applications, leveraging Palantir’s technology to increase efficiencies and realize operational benefits. The company has conducted more than 1,300 bootcamps, over 500 of which have been held in the past three months alone, to show users how to implement the technology to realize tangible value in real time. These workshops are a key component of Palantir’s growth strategy.
While the various platforms that make up Palantir’s portfolio all have “specific focuses and capabilities” and are expected to see robust demand, it is its AIP (Artificial Intelligence Platform) that remains the main driver in both the commercial and government sectors, and serves as the company’s primary means of attracting and retaining customers.
And it’s something Ives agrees with: “AIP is the cornerstone of this significant opportunity for us, as more companies realize AIP’s potential to drive value by accelerating enterprise transformation, with a significant number of organizations signing long-term agreements that will have a significant impact on their operations,” the analyst explained.
So, ultimately, what does this mean for investors? Ives rates PLTR shares an Outperform (i.e. Buy) and has a Street-high price target of $35, which indicates a 22% upside potential from current levels.
However, the rest of the Street is taking a much more cautious stance. Based on a combination of 6 Holds, 4 Sells, and 3 Buys, the analyst consensus is rating the stock as a Hold (i.e. Neutral). Additionally, the average target price of $22.55 suggests that the stock is overvalued by about 21%. (look Palantir stock price forecast)
To find great ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, our tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is for informational purposes only. It is extremely important that you conduct your own analysis before making any investment.
