There's plenty for bulls and bears to hash out over Palantir Technologies. Bulls point to improved profitability for PLTR stock. Bears focus on revenue growth. Then, there's buzz over artificial intelligence stocks to consider for the maker of data analytics software.
Meanwhile, Palantir joined the S&P 500 index on Sept. 23. The inclusion enables mutual funds and institutional investors to buy PLTR stock.
"Retail ownership has decreased 7 points to 42% post the S&P 500 inclusion, while index institutional ownership has increased four points, which may reduce the retail premium going forward," said Jefferies analyst Brent Thill in a report.
Palantir on Nov. 14 announced that it will transfer the listing of its common stock to the Nasdaq Global Select Market from the New York Stock Exchange. The company expects to begin trading as a Nasdaq-listed company on Nov. 26.
Palantir delivered third-quarter earnings that topped estimates while revenue handily beat Wall Street targets amid strong U.S. government growth.
After jumping on the Q3 earnings beat, PLTR stock has advanced 266% in 2024.
Palantir Stock: Anthropic Partnership
Also on Nov. 7, Palantir and startup Anthropic announced a partnership with Amazon Web Services to provide U.S. intelligence and defense agencies access to the Claude 3 AI models.
In October, Palantir formed a partnership with defense firm L3Harris.
"LHX will be leveraging the enterprise AI-enabled data integration capabilities of Palantir to further improve costs, gain deeper supply chain visibility, and make quicker more informed decisions for the business," said a Bank of America report. "The new partnership is also being leveraged in AI-enabled new products."
Meanwhile, Palantir on Oct. 31 published "The Defense Reformation," authored by Chief Technology Officer Shyam Sankar. The treatise recommends ways to rebuild America's edge in defense-focused, innovative mass production.
Analysts with bearish views on Palantir stock continue to question its valuation.
However, IBD doesn't put much weight on P/E ratios and other valuation metrics. On the other hand, here are some time-tested trading rules.
Palantir Stock Ranks No. 6 In IBD 50
And, Palantir stock ranks No. 6 on the IBD 50 roster of growth stocks. In addition, Palantir is among AI stocks to watch.
Meanwhile, PLTR stock has out-performed other software companies. The iShares Expanded Tech-Software Sector ETF, an industry index that includes Microsoft and many big-cap software companies, has gained 14% in 2024.
Palantir has already mined the AI opportunity with government customers for intelligence gathering, counterterrorism and military purposes. Now Palantir aims to use generative AI to spur growth in the commercial market.
The company continues to make progress with its "Artificial Intelligence Platform," initially rolled out in early 2023. Palantir hosted its fifth AIP event in September.
At AIPCon 5, clients such as the National Geospatial-Intelligence Agency, Aramark, and Mount Sinai demonstrated Palantir AI technologies in better supply chain management, operational efficiencies and health patient care.
However, Palantir has not disclosed pricing for AI products. Some analysts say Palantir needs to show more revenue progress with generative AI commercial deployments.
Further, Palantir in August hired Mike Gallagher, a former Wisconsin congressman, as head of its defense business.
In a rare interview, Palantir Chief Executive Alex Karp talked about AI, America's future and other topics.
PLTR Stock: Project Maven Extended
Still, Wall Street analysts now do not expect software makers to monetize generative AI, or "conversational AI," in a material way until 2025. Here's a look at the enterprise AI market.
Meanwhile, the U.S. Army on May 29 announced that it has extended Palantir's existing Maven Smart System (MSS) contract for five years. Palantir was one of the early contractors for Project Maven, launched in 2017.
Project Maven is part of the U.S. Army's effort to bring artificial intelligence to the battlefield. The Maven contract brings in about $90 million annually, one analyst estimated.
Also, Palantir announced that the Department of Defense Chief Digital and Artificial Intelligence Office (CDAO) awarded a contract that could be worth $480 million over a 5-year period
On the news front, there's plenty for investors to mull. Oracle and Palantir announced a cloud computing alliance.
In addition, Palantir has won a new, $178 million U.S. Army contract for project TITAN, a battlefield system using artificial intelligence.
Meanwhile, here's a look at Palantir's international business, including how AI is doing in Europe.
Also, Palantir stock jumped 167% in 2023. The Nasdaq composite climbed 43% while the S&P 500 rose 24%.
PLTR Stock Fundamentals
The Denver-based company offers three platforms. One is Palantir Gotham, used primarily by government agencies. There's Palantir Metropolis for banks, financial services firms and hedge funds. And Palantir Foundry is used by corporate clients.
Palantir gets nearly 60% of its revenue from government agencies. Decelerating revenue growth is an issue. In 2022, revenue growth slowed to 24% from 40% in 2021 and 47% in 2020. In 2023, revenue grew 17% year-over-year to $2.23 billion.
Palantir Stock Technical Analysis
Meanwhile, Palantir's Relative Strength Rating stands at 99 out of a best-possible 99.
Also, Palantir stock holds a Composite Rating of 99 out of a best-possible 99, according to IBD Stock Check-up.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
PLTR stock holds an Accumulation/Distribution Rating of A. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.
As of Nov. 20, Palantir stock is very extended above an entry point of 29.83, according to MarketSurge. Also, PLTR stock trades well above a 5% buy zone.
Some investors may want to take profits.
Investors can sign up for news alerts from Palantir investor relations department here.
Further, check out IBD Stock Lists and other IBD content to find dozens more of the best stocks to buy or watch.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
