Palantir Technologies (NYSE:PLTR) is a data analytics and AI company that has garnered attention due to its significant stock price gains in 2023. While the stock has risen by 155% this year, it has experienced an 18.8% decline from its 52-week high. Wall Street analysts’ opinions on Palantir stock are mixed, with some expressing bearish views and others being optimistic about its long-term potential. Here’s a summary of the key points to consider:

Palantir’s Focus on AI 

Palantir is strategically investing in AI, with its Artificial Intelligence Platform (AIP) receiving significant interest. The AIP employs large language models to enhance data analysis and decision-making. The company has formed partnerships and secured contracts, including a $250 million contract with the U.S. Army to scale AI and machine learning capabilities.

Financial Performance 

In Q2, Palantir generated 57% of its revenue from government customers, which provides stability during economic uncertainty. Total revenue in the quarter grew by 13% year-over-year to $533 million, marking the third consecutive quarter of GAAP profits. The company expects a profitable Q3 and raised its full-year revenue guidance.

Wall Street Opinions

Wall Street analysts have varying opinions on Palantir’s short-term outlook. Some believe the stock faces competition from top AI tech players, leading to bearish views. However, others are optimistic about Palantir’s AI capabilities, commercial prospects, and growth across different industries. These analysts have “buy” ratings and target prices indicating upside potential.

Analyst Consensus

For Q3, analysts expect revenue to increase by 16.4% year-over-year to $556.4 million, with an EPS of $0.02. For fiscal 2023 and 2024, revenue and EPS are expected to grow, in line with management’s forecasts. Wall Street’s consensus rating for the stock is “hold,” with a potential downside of about 16% based on the average price target.

Valuation

Palantir’s current valuation is relatively steep, with a price-to-sales ratio of 18 and a price-to-earnings ratio of 60 based on 2024 growth estimates.

In summary, Palantir is focusing on AI and forming strategic partnerships that have the potential to drive its long-term growth. However, as an emerging tech company, it carries risks. Investors should carefully assess their investment decisions and consider the mixed opinions from Wall Street analysts. The stock’s performance will depend on its ability to justify its valuation and market perception in the AI space.

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