Which side of the fence are you on? You can either be in the winner’s circle and benefit from Palantir Technologies’ (NYSE:PLTR) amazing growth story, or you can sit on the sidelines and worry that PLTR stock is “due” for a crash. So far, investors on the long side of the trade have profited handsomely. Considering Palantir’s outstanding results, there’s no compelling reason to turn bearish now.
Just to provide a recap, Palantir Technologies is headquartered in Colorado and provides security products and services. Palantir embeds artificial intelligence functionalities into many of its products. With the cybersecurity and AI markets potentially poised for substantial growth, Palantir stock absolutely deserves an “A” grade.
Diverging Analyst Views of PLTR Stock
In light of Palantir Technologies’ stellar fourth-quarter 2023 results, Wedbush Securities analyst Dan Ives called Palantir the “Messi of AI.” This was a reference to Lionel Messi, a soccer superstar.
Ives published a $30 price target on PLTR stock, which implies substantial upside in the near term. However, not every expert on Wall Street is as enthusiastic as Ives is.
HSBC Global Research analyst Stephen Bersey downgraded Palantir stock from “buy” to “hold” and assigned the shares a not-so-optimistic $22 price target. Apparently, Bersey is concerned about Palantir Technologies’ valuation.
Yet, Bersey also expects (per Barron’s) that Palantir “can grow earnings on a compounded basis more than 24% a year through 2028.” Bersey admitted that Palantir Technologies’ “commercial business is witnessing a strong acceleration, especially in the U.S., as demand for the company’s AI Platform remains strong.”
If it’s true, as Bersey states, that Palantir “is well positioned to benefit from the strong demand for its artificial intelligence products,” then it’s not particularly productive to worry about the company’s valuation. Palantir Technologies’ valuation is justified with strong growth potential.
Is Palantir About to Be Included in the S&P 500?
Here’s another pillar of the bullish argument for PLTR stock. As a Seeking Alpha article by Noah’s Arc Capital Management suggests, Palantir Technologies is a good candidate for inclusion in the S&P 500 index.
Noah’s Arc Capital Management observes that Palantir, after reporting excellent fourth-quarter 2023 results, has the “potential for 4 straight quarters of operating profitability, increasing its chances of joining the S&P 500.” To that, we could add that Palantir Technologies achieved five consecutive quarters of GAAP-measured profitability.
We could also mention that Palantir’s Q4 2023 U.S. commercial revenue grew 70% year over year to $131 million. Yet, there’s no need to belabor the point. Palantir Technologies has earned its “Messi” superstar status.
If Palantir is included in the S&P 500 index, then PLTR stock would be a component of many index funds. This could buoy the Palantir share price while also adding a sense of prestige to the company.
PLTR Stock: Don’t Fret About Palantir’s Valuation
Last year, traders who worried about Palantir stock being in a “bubble” ended up missing out on a great buying opportunity. Going forward, Palantir Technologies has tremendous growth prospects and fretting over Palantir’s valuation is counterproductive.
Besides, Palantir Technologies looks like a strong candidate for inclusion in the S&P 500 index. So, don’t be deterred by the worry warts’ objections. PLTR stock has the potential to rally throughout 2024, and it earns a confident “A” grade.
On the date of publication, Louis Navellier had a long position in PLTR. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
