Palantir’s stock could rise 80% over the next 12 months thanks to its AI developments, Wedbush said.
Wedbush’s Dan Ives raised Palantir’s target to $30 following the company’s earnings report.
Palantir said its revenue rose 20% last quarter, significantly beating Wall Street estimates.
Palantir is cementing itself as a top choice for exposure to the ongoing artificial intelligence revolution, according to Wedbush Securities.
Following the company’s strong earnings in the final three months of 2023, Wedbush’s Dan Ives raised the company’s 12-month price target for the technology company’s shares to $30, representing an upside of nearly 80% from Monday’s closing level of $16.72.
Palantir shares were up 25%, trading at $20.93 around midday Tuesday.
“Last night, for Palantir, the company went from an off-Broadway play to a prime-time Broadway theater right next to Times Square under the bright lights,” Ives said in the memo, crediting Palantir an “Outperformance” rating.
The company, known for its defense and intelligence work with U.S. and international governments, Ives notes that Palantir is poised to ride the wave of AI hype. Ives praised Palantir’s artificial intelligence platform (API), which has gained traction with new and existing customers.
Palantir CEO Alex Karp said in a statement letter to shareholders that commercial demand for large language models continues to be “relentless”.
“It’s clear that as AI use cases explode, enterprise CIOs are looking to Karp & Co. as AI’s golden child for a platform to create AI frameworks for the future,” Ives said.
The technology company projects that U.S. commerce revenue will exceed $640 million in 2024, reflecting growth of at least 40%. Palantir reported Monday that fourth-quarter revenue rose 20% to $608.4 million, beating Wall Street estimates of $602.4 million in revenue.
Wall Street’s enthusiasm for AI is still high, even after the nascent technology generated huge gains in the tech sector in 2023. Chipmaker Nvidia hit new highs last week after earnings Giants such as Microsoft and Meta Platforms have indicated big plans for AI and demand for the GPUs that power the technology.
As a handful of large-cap companies continue to produce the biggest returns for investors, markets are looking for the next opportunity in AI as valuations among the Magnificent Seven appear extreme and many experts are warning. a potential bubble reminiscent of the dot-com era.
Palantir, Ives says, is one such opportunity in the AI space.
“In a nutshell, PLTR remains an undiscovered gem and an essential part of our thesis about the AI revolution that is just taking shape in the tech world,” Ives added.
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