Palantir Technologies Inc. (NASDAQ:PLTR) Leads AI Transformation in the Software Industry

• Palantir Technologies Inc. (NASDAQ:PLTR) is positioned to lead the AI transformation in the software industry, with significant investments flowing into AI infrastructure.
• The company's stock has seen remarkable growth, reaching a new all-time high with a 55% year-to-date increase and 365% growth over the past year.
• Palantir's strong Q4 2024 earnings report and positive revenue guidance have made it a strong candidate for momentum investors, achieving a Momentum Style Score of A.

Palantir Technologies Inc. (NASDAQ:PLTR) is a prominent player in the software industry, particularly in the realm of artificial intelligence (AI). The company is known for its data analytics platforms, which are widely used by government agencies and commercial clients. As AI becomes more integral to business operations, Palantir is positioned alongside companies like Salesforce Inc. to lead this transformation, as highlighted by Wedbush.

AI spending is increasing, with it now making up about 10% of IT budgets, and some companies are allocating up to 15% as they move from planning to execution. Over the next three years, approximately $2 trillion is expected to be invested in AI infrastructure. While initial investments have focused on Nvidia's chips and cloud platforms from Microsoft, Amazon, and Google, the real potential lies in software solutions, where Palantir excels.

Palantir's stock has seen significant growth, reaching a new all-time high, driven by its strong Q4 2024 earnings report. The stock has surged 55% year-to-date and 365% over the past year. As of the latest update, PLTR is valued at $116.65, marking an increase of over 5% since the last market close. The company reported adjusted earnings per share of $0.14, exceeding expectations, and revenue of $828 million, surpassing the anticipated $776 million.

Palantir has issued strong guidance, projecting Q1 revenue between $858 million and $862 million, and full-year sales ranging from $3.74 billion to $3.76 billion, which is above the forecasted $3.52 billion. This positive outlook has contributed to its momentum in the stock market. According to Zacks Investment Research, Palantir is a strong candidate for momentum investors, achieving a Momentum Style Score of A, indicating its potential for profitable trades.

Despite a recent decrease of 3.45% or $4.03, bringing the stock price to $112.62, Palantir's market capitalization stands at approximately $256.55 billion. The stock has traded as low as $112.10 and reached a high of $118.66 today, which also marks its highest price over the past year. The trading volume for the day is 92.95 million shares, reflecting strong investor interest.

BofA Securities analysts increased their price target for Palantir Technologies (NYSE:PLTR) from $55 to $75, maintaining their Buy rating. The upgrade reflects expectations of accelerated growth in the U.S. and a strengthening competitive position.

Palantir’s penetration in both government and commercial sectors was described as being in the early stages, with expanding use cases and enhanced interoperability driving further adoption and upselling opportunities. The analysts highlighted the company’s ability to operationalize generative AI through its complex Ontology, addressing challenges in security, governance, and data robustness. This positions Palantir as a key player in enabling businesses to enhance margins through software and AI rather than relying solely on fixed asset scale.

Software has become increasingly critical in industrial production, representing 17% of U.S. nonresidential private fixed investments in 2023, compared to 11% in 2005. This trend supports Palantir’s long-term growth prospects as organizations prioritize automation, real-time data analysis, and process control.

BofA also raised its three-year commercial growth forecast for Palantir to 34% from 32%, citing the company’s expanding commercial customer base, partnerships, and distribution channels.

BofA Securities analysts increased their price target for Palantir Technologies (NYSE:PLTR) from $55 to $75, maintaining their Buy rating. The upgrade reflects expectations of accelerated growth in the U.S. and a strengthening competitive position.

Palantir’s penetration in both government and commercial sectors was described as being in the early stages, with expanding use cases and enhanced interoperability driving further adoption and upselling opportunities. The analysts highlighted the company’s ability to operationalize generative AI through its complex Ontology, addressing challenges in security, governance, and data robustness. This positions Palantir as a key player in enabling businesses to enhance margins through software and AI rather than relying solely on fixed asset scale.

Software has become increasingly critical in industrial production, representing 17% of U.S. nonresidential private fixed investments in 2023, compared to 11% in 2005. This trend supports Palantir’s long-term growth prospects as organizations prioritize automation, real-time data analysis, and process control.

BofA also raised its three-year commercial growth forecast for Palantir to 34% from 32%, citing the company’s expanding commercial customer base, partnerships, and distribution channels.

Palantir Technologies (NYSE:PLTR) raised its full-year outlook following a stellar third-quarter performance fueled by a wave of new AI-driven business. The company’s stock surged over 13% in pre-market today.

For the quarter, Palantir reported adjusted earnings of $0.10 per share, beating Wall Street analyst expectations of $0.09. Revenue climbed 30% year-over-year to reach $725.5 million, surpassing the projected $703.4 million. The robust results were propelled by a 39% increase in customer count, as demand for AI solutions continued to accelerate.

The company’s momentum has led it to raise its full-year revenue guidance to a range of $2.805 billion to $2.809 billion, up from its previous range of $2.742 billion to $2.750 billion. For the fourth quarter, Palantir projected revenue between $767 million and $771 million, well above the consensus estimates of $742.3 million.

Palantir Technologies (NYSE:PLTR) raised its full-year outlook following a stellar third-quarter performance fueled by a wave of new AI-driven business. The company’s stock surged over 13% in pre-market today.

For the quarter, Palantir reported adjusted earnings of $0.10 per share, beating Wall Street analyst expectations of $0.09. Revenue climbed 30% year-over-year to reach $725.5 million, surpassing the projected $703.4 million. The robust results were propelled by a 39% increase in customer count, as demand for AI solutions continued to accelerate.

The company’s momentum has led it to raise its full-year revenue guidance to a range of $2.805 billion to $2.809 billion, up from its previous range of $2.742 billion to $2.750 billion. For the fourth quarter, Palantir projected revenue between $767 million and $771 million, well above the consensus estimates of $742.3 million.

Bank of America raised its price target for Palantir (NYSE:PLTR) to a Street-high of $50 per share, up from $30, reaffirming its Buy rating on the stock. The bank sees Palantir’s recent inclusion in the S&P 500 as a pivotal moment, prompting institutional investors to reassess the company's long-term growth potential, which has been widely underestimated.

Comparing Palantir’s current trajectory to the early days of mobile phones, Bank of America suggests that, just as the mobile revolution led to trillion-dollar companies, Palantir is similarly positioned for massive expansion. The analysts highlight Palantir's technological strengths, particularly its "Ontology" platform, which integrates data and automation for enhanced decision-making. This, they argue, makes Palantir a crucial player in the evolving landscape of machine learning, AI, and quantum computing.

What distinguishes Palantir, according to the note, is its unique sales strategy. Engineers collaborate directly with clients to develop tailored solutions, creating deeper, more valuable relationships and boosting the company’s pricing power. The bank also points to Palantir's 35% operating profit margin as evidence of this approach’s success in the competitive software market.

Overall, Bank of America believes Palantir's business model and technological prowess position it for substantial growth in the coming years.