Palantir Technologies Inc. proved its critics wrong with its outstanding Q4 results, propelling its stock to reach its all-time high.
Analysts Change Their Stance
Following the earnings report on Monday, two formerly bearish analysts have shifted their positions on Palantir's stock (PLTR, +28.14%). They recognized the company's momentum in its U.S. commercial business, which has experienced significant growth due to artificial intelligence applications.
According to Citi Research analyst Tyler Radke, the strength of Palantir's U.S. commercial business is becoming increasingly hard to ignore. Although the total revenue expectations were exceeded by only 1%, Radke highlighted the "exceptionally strong" leading indicators, such as a 54% year-over-year growth in total billings. He also praised the continued profitability strength of the company, with earnings per share surpassing the consensus view by 35% and free cash flow exceeding estimates by 62% for Q4.
In light of these positive developments, Radke upgraded Palantir's stock from sell to neutral and raised his price target to $20.
Palantir's stock witnessed a remarkable surge of 27% during Tuesday morning trading, on track to achieve its highest one-day percentage gain on record.
Another analyst, Brent Thill from Jefferies, also abandoned his bearish stance on Palantir.
Palantir's AI Platform Shows Impressive Growth
Palantir's AI Platform (AIP) has exceeded expectations and is gaining momentum, prompting analysts to upgrade their ratings on the stock. BofA Securities analyst Mariana Perez Mora described AIP as still being in its early stages but making a significant impact. Palantir's U.S. commercial business saw a remarkable 70% increase in revenue during the last quarter, indicating the company's unique position as a leader in AI-powered data-driven decision making.
While some analysts remain cautious about Palantir's valuation concerns and its underperformance in other divisions, the majority recognize the potential and promise of the AI Platform. Louie DiPalma from William Blair predicts that the stock will experience a temporary increase due to recent earnings but anticipates a downward trend in the near future.
Despite these reservations, the consensus among analysts remains positive regarding Palantir's growth trajectory, particularly with its AI Platform leading the way.