As red-hot as the artificial intelligence (AI) market is, Wall Street is still cautious about some companies. The best example is Palantir Technologies (NYSE:PLTR) stock. Despite its 66% year-to-date (YTD) gains over the past year and dynamic reach across many facets of the tech sector, it has still garnered undeniably mixed sentiment from analysts, the majority of whom rate it as a “hold.”
But this week, things are off to a good start for Palantir. One firm has named it as a likely winner for the upcoming earnings season. While Wedbush Securities sees high growth ahead for other stocks, its other tech favorites trade at much higher levels than PLTR stock. This could make the company highly appealing to investors seeking new AI plays.
What’s Happening With PLTR Stock
It’s been an excellent month for Palantir and so far, its winning streak doesn’t appear to be easing. As of this writing, PLTR stock is up 3.5% for the day, and its current trajectory suggests it will continue trending upward. Despite minimal gains over the past week, today’s performance has pushed it into the green by 15% for the month.
Wedbush analyst Dan Ives, known for his tech sector expertise, recently issued an investor note on his predictions for the tech sector. As noted, his team sees several top stocks, including Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT), benefitting from the second-quarter earning season. Palantir stands out on that list as not being among the Magnificent Seven. But Ives clearly sees potential in it. As he states of his team’s take:
“We believe 2Q earnings will be a major positive catalyst for the tech sector and expect tech stocks to be up another 15% for the year adding to the robust tech gains in 1H2024 as now the broader tech growth story takes center stage led by software, cyber security, digital advertising, and semis.”
The analyst also highlights the importance of the AI revolution, noting that both “show cloud deployments and enterprise AI spending” are “tracking nicely ahead of Street expectations,” which puts names like PLTR stock in an excellent position to surge as the Q2 earnings season sparks new AI enthusiasm among investors.
Why It Matters
Even after its excellent past two quarters, PLTR stock still trades at less than $30 per share. That’s substantially lower than most of its dominant AI peers, which will likely make it a tempting play for investors looking to gain exposure to the booming market. Palantir is known as a data analytics company, but it has a reach across many sectors, including cybersecurity, energy and defense contracting, which has spawned a lucrative history of procuring government contracts. Earlier this year, it received a $178 million contract from the U.S. Army to build valuable ground station prototypes.
Now that Ives has flagged it as a probable Q2 winner, PLTR stock is likely to rise even more over the coming weeks. While most people will likely be watching the sector’s more prominent names, smart investors will keep at least one eye on this fast-growing AI standout.
On the date of publication, Samuel O’Brient 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
