Palantir Technologies (NYSE:PLTR) has evolved into a provider of artificial intelligence enabled software and services. Yet, let’s not forget that Palantir remains a premier provider of cyber-defense services. That’s crucial when international relations are unstable, so we’re assigning a confident “B” grade to Palantir stock today.
We’ve already identified Palantir Technologies as an AI gold rush winner. That story hasn’t changed, as the demand for Palantir’s Artificial Intelligence Platform could certainly persist in the coming quarters. In light of recent geopolitical events, however, investors should also consider Palantir stock’s potential as defense-technology play in 2024.
Could Palantir Stock Reach $48 After Oracle Deal Announcement?
As you may have heard already, Palantir Technologies agreed to a software deal with Oracle (NYSE:ORCL). Specifically, Palantir will make some of its products, including its AI software, “deployable” through Oracle’s cloud-based platform.
Quite possibly, TheStreet Pro analyst Bruce Kamich had the Palantir-Oracle deal in mind when he raised his price target on Palantir stock from $22 to an eyebrow-raising $48. Furthermore, Kamich noted the stock’s momentum, observing, “Share prices have been on an upward-trading path for the past 12 months.”
Those are fair points, though $48 seems quite ambitious. PLTR stock certainly has momentum, but some investors may object to Palantir Technologies’ valuation. Notably, Palantir’s trailing 12-month price-to-earnings, price-to-sales and price-to-book ratios are significantly higher than the respective sector-median multiples.
It’s up to you to decide whether this is a major concern. It doesn’t have to be a deal-breaker, though, since the Oracle partnership should enhance Palantir Technologies’ value for the foreseeable future.
Palantir: When Cyber-Defense Becomes Indispensable
Surely, by now, you’ve heard about the conflicts that are flaring up in the Middle East and elsewhere. So, what’s the best defense-sector play during tense and uncertain times?
You might immediately think of companies that manufacture missiles and planes. That makes sense, but we invite you to conduct your due diligence on Palantir Technologies, which has provided critical data-analytics and cyber-defense services to government entities for years.
One commentator called Palantir stock a “U.S. defense asset,” and that’s a reasonable assessment. The company’s Army contracts certainly augment the company’s value, even if some people might not like Palantir Technologies’ valuation multiples.
The point here is that Palantir Technologies provides services that are indispensable in an often unstable world. Sure, investors can choose to not think about the unfortunate tensions between nations. Or, they can see the reality of the situation and adjust their portfolio strategy accordingly.
Palantir Stock: Consider Realistic Near-Term Price Targets
It’s fine to be optimistic. However, you don’t have to assume that PLTR stock will surge to $48. Given Palantir Technologies’ current valuation, investors should be realistic and look toward price targets of $27.50 and $30 before anticipating higher price points.
Investors should open their eyes to the reality of an unstable world. Palantir Technologies offers defense-technology services that are essential as international tensions flare up. So, finally, Palantir stock earns a “B” grade and it deserves consideration as a worthy portfolio addition.
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.
