Up 50% so far in 2024, Palantir Technologies (NYSE:PLTR) stock is built for long-term success.
After enduring a big downturn during the 2022 bear market, PLTR stock has come roaring back. In the last 12 months, Palantir’s share price has more than tripled, having increased 217%. The stock is now up 172% since its October 2020 initial public offering. With new government contracts rolling in, growth in the private sector, and a push to enhance its products through artificial intelligence, Palantir’s future looks bright.
Contract Wins
Earlier in March, PLTR stock announced that it had won a $178.4 million contract from the U.S. Army. The contract is for a project known as “TITAN,” an acronym that stands for “Tactical Intelligence Targeting Access Node.” The contract will see Palantir build mobile ground stations for the U.S. Army that are powered by AI and machine-learning. The mobile ground stations are vehicles that help the Army with missile targeting and firing.
The new contact, which runs over two years, is Palantir’s fourth-largest contract by annual revenue. While Palantir has been working to secure more business in the private sector, it continues to get most of its revenue from government contracts, both in the U.S. and abroad. While some people still criticize Palantir for its government and defense work, investors don’t seem to mind. Palantir’s stock rose 7% on news of the latest contract win.
Push Into AI
The TITAN project is just one of many areas where PLTR stock is using AI and adopting the technology to enhance its products and services. In its most recent earnings report, Palantir highlighted its new AI platform and noted that it conducted 600 tests of AI technologies in 2023, up from less than 100 such tests in 2022. Palantir CEO Alex Karp has said that demand for AI products is “unrelenting.”
Palantir’s financial results also continue to impress. PLTR stock has been rising ever since the company turned profitable, something it wasn’t when it went public. The company has reported four consecutive quarters of profitability, making it eligible for inclusion in the S&P 500 index. Palantir also that said its private sector revenue grew 70% year-over-year in Q4 2023, and it now has 221 commercial customers, up 55% from 2022 levels.
Buy PLTR Stock
If there’s one knock on Palantir’s stock it is that it’s expensive trading at 273 times future earnings estimates. That said, at $25 a share, the stock is easy for most investors to buy. And when you consider the company’s success in winning government contracts, its profitability, share price appreciation, and exposure to AI, the company looks like a solid bet. PLTR stock is a buy.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
