Janice R. Andrews
With yet another spike in its stock price today, Palantir Technologies (NYSE: PLTR) is continuing its incredible rise. As of 1:50 p.m. ET on Wednesday, the stock had risen as much as 12.3% during early trading hours and was still up a strong 11%.
Palantir’s announcement of landing a big Army contract, which strengthened its position in the data mining and artificial intelligence (AI) space, served as the impetus for this upsurge. In order to offer 10 Tactical Intelligence Targeting Access Node (TITAN) systems—which are specialized in using sensor data to pinpoint targets—the business was awarded a contract for $178.4 million. Additionally, there is room for growth with this deal, as there may be 100 to 150 more systems delivered in the future.
Palantir Technologies has an impressive history of securing contracts in this industry and supplying AI solutions to the US government and its allies. Government contracts, however, are not the only reason for the stock price’s recent rise. Palantir has a significant growth potential since it has effectively shifted its AI capabilities to serve corporate enterprises. Palantir helps major organizations with a range of tasks, including inventory management, product development recommendations, and trend analysis of customer support interactions. Palantir does this by using artificial intelligence (AI) to uncover complex patterns within massive datasets.
The company’s recent financial performance demonstrates how well it can adjust to market needs. Palantir’s U.S. commercial revenue grew by an impressive 70% year over year in the fourth quarter, while the company’s overall contract value increased by an even more astonishing 107%.
Palantir Technologies has performed amazingly well, but there are concerns about whether investing in the company at its present price is sustainable. The stock, which is selling at 80 times ahead profits and 22 times forward sales, is expensive according to standard valuation criteria, despite having increased by 215% over the last year and by 55% year to date. A different story emerges when one uses a future price/earnings-to-growth ratio, indicating that Palantir could still be cheap given its promising growth prospects.
Growing industry demand for AI solutions bodes well for Palantir’s future development trajectory. Investors stand to gain a great deal as long as the firm continues to use its wealth of AI knowledge.
For investors with a long-term outlook, Palantir Technologies’ stock offers an alluring investment opportunity despite being pricey according to traditional valuation criteria due to its potential for consistent development in the rapidly expanding AI industry.
Note:
This article’s author disclaims any financial interest in the firms it mentions and no stakes in the stocks it mentions.
Warning:
The views shared in this article are not financial advice and should not be interpreted as such. Before making an investment, people should do their own research or speak with a financial counselor because investing in equities has risks.
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