Don’t let short-term volatility shake you out of a good long-term investment. That’s a principle to keep in mind if you’re holding a share position in Palantir Technologies (NYSE:PLTR). There will be ups and downs, but this doesn’t change the bullish thesis and Palantir stock earns a fairly confident “B” grade.
Not long ago, we encouraged investors not to succumb to the “sell the news” moment after Palantir Technologies released its first-quarter 2024 financial results. The market remains uncertain about Palantir’s status. Stay calm, focus on the facts, and ignore the noise as Palantir Technologies continues to thrive in the tech sector.
Analyst Sees ‘Solid Upside’ for Palantir Technologies
If you’re really worried about Palantir Technologies, this might help to quell your nerves. Not long ago, Citigroup analyst Tyler Radke raised his Palantir stock price target to $25, which is approximately the upper limit of the stock’s recent price range.
Radke cited “solid upside” for Palantir Technologies in light of the company’s first-quarter 2024 results. For example, Radke pointed out Palantir’s “record” new customer additions; impressively, the company’s U.S. commercial customer count grew 69% year over year to 262 customers.
That’s not the only evidence of “solid upside,” by the way. Perhaps the greatest highlight of Palantir Technologies’ quarterly results was the company’s U.S. commercial revenue. Specifically, this revenue segment increased 40% YOY to $150 million.
How did the company achieve this? According to Palantir Technologies CEO Alex Karp, “I don’t believe in the U.S. commercial market we have competition.” Perhaps Karp has a flair for hyperbole. Still, his confidence isn’t entirely unjustified as 40% YOY growth isn’t anything to sneeze at.
Sometimes, the Market Is Spoiled and Unreasonable
For Q1 of 2024, Palantir Technologies beat Wall Street’s consensus revenue estimate and delivered an in-line adjusted-earnings result. Palantir recorded its largest quarterly profit in the company’s history.
Palantir Technologies’ quarterly results were quite acceptable — or at least, they would be acceptable to a completely rational market. However, short-term stock traders can be unreasonable and, frankly, quite spoiled sometimes.
Apparently, some people were disappointed because Palantir Technologies’ YOY U.S. commercial revenue growth decelerated from 70% in the prior quarter to 40% in Q1 2024. Seriously, though — did investors actually expect the company to continue growing this segment’s revenue at a 70% pace? That’s unrealistic and unreasonable.
Also, a Bloomberg report suggested that the market was disappointed by Palantir Technologies’ full-year 2024 revenue guidance. Let’s look at the facts, though.
Palantir raised its 2024 revenue-guidance range to $2.677 billion to $2.689 billion. “Analysts expected $2.68 billion, on average,” Bloomberg stated. There’s nothing deeply objectionable here — but again, a spoiled market is quick to find fault.
Palantir Stock: Stick to the Facts, Jack
We’re not here to tell you to invest in Palantir Technologies. What we will propose, however, is that you can stay calm when shortsighted short-term traders create volatility.
It’s only a sign that some unreasonable traders don’t know how to properly assess Palantir Technologies’ value. Chances are good that Palantir stock will resume its overall uptrend and will surpass Radke’s $25 price target. So, all in all, the stock earns a “B” grade and investors should continue to conduct their due diligence on Palantir Technologies.
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.
