Palantir Stock Predictions: Will PLTR Ever Hit $100?


  • Palantir Technologies (PLTR) is transforming the way business gains insight into the vast data it produces.
  • Its Artificial Intelligence Platform gives customers access to billions of disparate data points to act upon.
  • Palantir stock still has a number of hurdles to get over before hitting its stride.
Palantir stock - Palantir Stock Predictions: Will PLTR Ever Hit $100?

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For a company that got its started with investment money from the U.S. Central Intelligence Agency and other three-letter spy shops, Palantir Technologies (NYSE:PLTR) is dramatically transforming the way the private sector does business, and Palantir stock has benefitted.

The stock went public in 2020 at $10 a share and today trades at just under $22 a stub. It’s a 130% gain during a time the S&P 500 only returned 67% for investors. That’s a compounded annual growth rate (CAGR) of over 20%, meaning it would take eight years to reach $100 per share if it kept growing at that rate. Is that reasonable? Let’s find out!

The Real Opportunity for Growth

Founded in 2003 as an analytics business for risk assessment for the government, Palantir eventually branched out into crunching numbers for businesses.

The decision was twofold: businesses generate billions of data points that are unusable until they are deciphered and analyzed and the private sector is a much larger opportunity than the government.

Although the public sector is still where most of Palantir’s revenue comes from, it won’t be long before the private sector is dominant. It is a natural outlet for Palantir’s deep analysis capabilities.

In the first quarter, government sales represented 52% of the $634 million in total revenue. The government sector saw growth accelerate, sequentially rising from 11% growth in the fourth quarter to a 16% increase this quarter.

Commercial revenue dropped from 70% to 40%, respectively. Still a significant increase, but Wall Street is worried private sector growth isn’t unsustainable. That caused Palantir stock to tumble and made the run to $100 more challenging.

A Platform to Build On

Big Data companies have been around for years. More than a decade ago companies were trying to figure out how to capitalize on the quintillions of bytes of data businesses create every day.

IBM (NYSE:IBM), Oracle (NYSE:ORCL), SAP (NYSE:SAP) and Teradata (NYSE:TDC) were helping businesses organize and understand the information they generated long before artificial intelligence was around.

It was AI, however, that made it possible to clean, funnel and structure all of this data. Palantir Technologies went all in on AI and machine learning algorithms.

It is what enables the data analytics firm to turn the information into meaningful and actionable reports.

Palantir’s Artificial Intelligence Platform in particular can integrate data from across organizations, analyze it and package the output into a visually useful product.

AIP is the game-changing inflection point for the company because businesses don’t have to cobble together various programs to try and achieve the same effect. Palantir can build a native solution for the company in an environment focused on security and privacy.

Not a Smooth Runway for Expansion

Last year Palantir began holding “boot camps” to introduce potential customers to what AIP offered. By the end of last year, more than 560 companies signed on, achieving for Palantir in one quarter what it thought would take at least a year to complete.

The boot camps jump-start a potential customer’s introduction to generative AI. It shows Palantir is more interested in growing its customer base and not revenue. At least not at first.

It is bringing customers into the fold first, where it can cross-sell to them and build multiple streams of revenue. It’s a smarter, more farsighted strategy for long-term growth.

It’s also why I don’t see Palantir stock hitting $100 a share in eight years. It enjoyed an early burst as generative AI captured the public’s imagination. So despite the massive opportunity AI presents, the technology is still in its infancy. There will be speed bumps ahead.

Europe, for example, is taking a much more adversarial role in AI adoption. Restrictive regulations on those who use it will make adoption harder. That leaves AI essentially a U.S.-dominated force.

Not a small market, but also not the full-throated opportunity global expansion envisions.

Just because Palantir Technologies won’t immediately hit $100 doesn’t mean it’s a bad investment. Quite the contrary. PLTR stock would be an excellent company to buy and hold for the long haul.

On the date of publication, Rich Duprey did not hold (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 Publishing Guidelines.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.

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