Last month, Palantir Technologies (NYSE:PLTR) stock hit a new 52-week high, on the heels of a well-received quarterly earnings release. Since then, however, it has encountered resistance, at around $25. I understand your concern about this AI software stock topping out. Skeptics may claim Palantir’s rally is due to “AI mania,” but I disagree.
At least, not while there are numerous factors at play that suggest that not only is a reversal not set in stone. Shares may have more room to run in the near-term, and remain well-positioned to climb substantially higher over a multi-year time frame.
PLTR Stock: Why it Could Keep Climbing in 2024
Palantir shares are up by around 187.6% over the past twelve months. Since the start of the year alone, PLTR has increased in value by 38.7%, far outpacing major market indices. Again, a big reason for this is the market’s enthusiastic response to the company’s Q4 2023 earnings results.
During the quarter, the company reported year-over-year revenue growth of 20%, driven primarily by very strong growth in its commercial sector revenue (up 70% compared to the prior year’s quarter). Palantir also reported its fifth consecutive quarter of GAAP profitability, and provided 2024 guidance that beat sell-side forecasts.
PLTR stock may still have room for positive surprises and upward price movement. Despite market uncertainty, the adoption of AI technology by businesses remains strong.
As AI software demand stays high, it’s easier to see results in the coming quarters beating rather than falling short of expectations. That’s not all. There’s another key near-term catalyst, plus several long-term ones as well.
A Path Back to $39 Per Share…and Beyond
Besides the prospects of additional earnings beats/guidance raises, another near-term catalyst for PLTR stock is the possible adding of it to the S&P 500 this year. I discussed this catalyst before, including in my last Palantir article.
While not certain that PLTR is added to the famed stock index, if it is added, expect such an event to have a positive impact on the share price. Palantir’s inclusion in the S&P 500 would drive the purchasing of shares by index funds.
These factors could boost the stock in the short term, but it may take longer for it to rise by 38.7% or 187.6%. However, during this year, and during 2025, a surge back to its high-water mark ($39 per share) may be within reach.
Even as 2025 analyst consensus calls for 20.6% revenue growth, and 18.2% earnings growth, the top end of forecasts call for 28.5% revenue growth, and 36.4% earnings growth. Hitting the high end of forecasts, or at least coming close, may just well be enough to send PLTR to a new all-time closing high.
Even as the Crowd Grows Concerned, Let it Ride
HSBC analyst Stephen Bersey may take a more “on the fence” type view of Palantir right now. However, even he conceded that the company could experience annualized earnings growth of 24% through 2028.
Why? Accelerating the adoption of AI software by commercial clients, plus a resurgence in demand for Palantir’s products by governmental clients, could drive such growth.
Forget about merely re-hitting $39 per share. Sustaining such growth could send the stock to even loftier price levels, as I hinted above. The crowd may grow concerned, deciding to take profit and move to the side lines.
A few years down the road, however, letting it ride could prove in hindsight to be the best move. Feel free to maintain a PLTR stock position, or to enter/add to one at current prices.
PLTR stock earns an A rating in Portfolio Grader.
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.
