Palantir Technologies' (NYSE:PLTR) The company's stock began a bull run in early 2023 after the release of its artificial intelligence platform (AIP). The company has long relied on AI to provide analytical insights, but the release of AIP appears to have put the company's stock on the radar of investors.
The company was already a large-cap stock, but the rise in stock prices has increased its market capitalization to just over $35 billion. Early findings from the company's AIP bootcamp indicate the company has the potential to drive innovative levels of growth. The question for investors is whether this new growth rate can take over global market capitalization. AI stock It will reach the $1 trillion level by 2035.
Palantir's path to $1 trillion
At first glance, Palantir appears unlikely to reach a $1 trillion market cap by 2035. To reach that level over the next 11 years, the stock would need to rise at least 36% annually. Additionally, investors shouldn't assume it will get there just because of last year's stock price performance. For those who don't follow the company, Palantir stock has risen nearly 160% over the past 12 months.
One year of strong performance is just one year of strong performance. Overall, the stock has only risen about 75% since its IPO in September 2020. While it exceeds S&P500's total return over the same period has not increased enough to accelerate its rise to a $1 trillion valuation.
Company growth potential
It's an unlikely path, but not an impossible one for this growth stock. While achieving average annual growth rates of 36% is unlikely, the prospect is not entirely impossible. AIP boot camp. While discussions around the bootcamp didn't yield results that the company would share with the public, the potential benefits of generative AI tools are attracting investor attention.
In the healthcare field, the following companies HCA Healthcare Cleveland Clinic also applied AIP to dynamic scheduling to improve operational efficiency. In the technology field, panasonic uses AIP to scale its workforce and enable engineers to level up at a faster pace. The productivity gains are so great that one company claims he accomplished more in one day than his hyperscalers did in four months. If these results expand, revenue growth could accelerate further. His growth rate for the first three quarters of 2023 is already 16% annually.
Additionally, Palantir has been profitable in each of the past four quarters, reporting more than $120 million in net income in the first nine months of this year. Considering the potential of AIP, its profits should increase dramatically if more users take advantage of his AIP benefits. Also, given the potential for such rapid earnings growth, Palantir's forward P/E of 56x is unlikely to deter future bulls.
Will Palantir stock reach $1 trillion?
Ultimately, Palantir faces a difficult path to $1 trillion by 2035. Even considering the potential of AIP, it is unclear whether the stock price will be able to achieve an average growth rate of 36% or more.
Nevertheless, investors should take note of Palantir's AIP and its significant potential for productivity growth. Even if the market cap doesn't reach $1 trillion over the next 11 years, this stock should make investors significantly richer over the long term.
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Will Healy He holds a position at Palantir Technologies. The Motley Fool has roles in and recommends HCA Healthcare and Palantir Technologies. The Motley Fool has Disclosure policy.
Will Palantir become a $1 trillion stock by 2035? Originally published by The Motley Fool
