There is no doubt that Palantir (NYSE:PLTR) has benefited from the growing adoption of artificial intelligence (AI). While the company’s data mining and AI services were once the purview of the U.S. government and its allies, Palantir has branched out, providing services to private companies with AI and business analysis. Strong and growing demand has boosted its stock, which has risen 236% over the past year.
One Wall Street analyst believes much more is to come.
Capitalizing on the AI gold rush
Wedbush analyst Dan Ives increased his price target on Palantir to $35 while maintaining an Outperform (Buy) rating on the stock. That represents a potential gain of 42% from the stock’s closing price on Tuesday. Ives believes investors are underestimating Palantir’s Artificial Intelligence Platform (AIP), which he says is seen by many U.S. companies as the “launching pad for AI use cases.”
The analyst goes further, suggesting Palantir could generate revenue of $5 billion by fiscal 2027.
The path to profit
I think Ives is right. Palantir continually hosts AIP bootcamps, which take customers “from 0 to a use case in 5 days or less,” according to the company. “These immersive, hands-on keyboard sessions allow new and existing customers to build live alongside Palantir engineers, all working toward the common goal of deploying AI in operations.” »
The demand for these customizable systems is off the charts. In October, the management set a target of organizing 500 such training camps in the coming year. At the beginning of February, it had already completed 560, so this strategy is clearly paying off.
To reach $5 billion in revenue by 2027, Palantir would only need to achieve a compound annual growth rate (CAGR) of around 23%. That might be a bit ambitious but not unreasonable, given its 20% growth in the fourth quarter. If Palantir hits Ives’ revenue target of $5 billion by 2027, that represents a bright future. price/sales ratio by around 11, making the stock a bargain at the current price.
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Danny Vena holds positions at Palantir Technologies. The Motley Fool ranks and recommends Palantir Technologies. The Mad Motley has a disclosure policy.
Palantir Technologies stock is up 42%, according to 1 Wall Street analyst. Is the stock a buy at a 2-year high? was originally published by The Motley Fool
