Palantir Technologies Inc. (PLTR)
Palantir: A Rare AI Gem For The Brave - High Valuation And Its Implications
Palantir delivered strong Q3 earnings, beating estimates and raising FY 2024 guidance, driven by robust growth in both commercial and government segments. The recent performance is fueling concerns regarding the firm's valuation. PLTR's leadership in AI and data management could justify its premium, with significant long-term growth potential, substantial productivity, and cost-saving advantages for its clients.
Palantir Technologies (PLTR) Price Prediction and Forecast 2025-2030
Big Data is big business. According to platform provider Edge Delta, the market for data services is projected to grow from $220.2 billion in 2023 to $401.2 billion by 2028 — an increase of 82.2%. Palantir Technologies Inc. (NYSE: PLTR) is a major player in the space. The company was co-founded by entrepreneur and venture capitalist Peter Thiel, who was also the co-founder of PayPal and the first outside investor in Facebook. Since going public on Sept. 30, 2020, the stock’s price has risen over 534.11%, and it has seen a gain of more than 250.84% so far in 2024. At that growth rate, a $1,000 investment in Palantir’s IPO price of $9.50 would be worth $6341.05 today. Palantir stands as one of Big Data’s industry dominators. However, finding data-driven assessments of where the company’s stock will be in the medium and long term can be complicated. With Wall Street analysts only going as far as providing one-year price targets, it can be difficult for investors to accurately gauge predictions for stocks like these over longer horizons. But for buy-and-hold investors who want to know where Palantir’s stock might be several years down the road, 24/7 Wall Street has done the legwork and can provide insights around the numbers coming from the company, and which market segments the company is operating in that are most exciting to us. Key Points in This Article: Key growth drivers: Palantir’s four operating platforms, AIP, Foundry, Gotham and Apollo. The company’s AI platforms are in high demand from the federal government. Palantir’s two strategic partnerships with space companies will leverage its AI intelligence to drive innovation in space technology. If you’re looking for an AI stock early in the AI growth cycle, grab a complimentary copy of our “The Next NVIDIA” report. It has a software stock that could ride dominance in AI to returns of 10x or more. Recent Palantir Stock Updates and News 11/12/2024 Palantir has officially surpassed Lockheed Martin Corp in market capitalization. Yesterday, Palantir’s stock hit $60.24, an all-time high for the company. 11/8/2024 Palantir, Anthropic, and Amazon are teaming up to bring advanced AI technology to the U.S. government. The government will be able to use powerful AI tools like Claude 3 and 3.5, which will run on Amazon’s cloud services and be integrated into Palantir’s AI platform. 11/7/2024 Palantir saw a decline of 2.7% in its share price today, trading as low as $53.55. Trading volume was also slightly lower than average, with 52.5 million shares changing hands. 11/6/2024 Palantir continues to ride a wave of success as it hit all-time highs today. This surge is attributed to the company’s strong third-quarter earnings report. Palantir exceeded expectations, reporting earnings per share of six cents, surpassing analyst estimates of four cents. The company’s revenue reached $725.52 million, surpassing analyst prediction of $701.13 million and marking a 30% year-over-year increase. 11/5/2024 Palantir’s sock surged 23.5% today following the release of the company’s third-quarter earnings report. The company’s strong performance was fueled by a 40% year-over-year increase in global government spending, primarily from the U.S. government, which accounted for 56% of its total revenue. 11/4/2024 Palantir’s share price rose 0.1% today, trading as high as $42.04. 10/31/2024 Palantir’s stock price decreased 4.7% today, trading as low as $41.58. 10/29/2024 Storebrand Asset Management, a Norwegian investor, has sold its shares in Palantir (approximately $24 million). The decision was made due to concerns about Palantir’s provision of services to the Israeli military and security forces, which Storebrand believes may violate international humanitarian law and human rights. 10/28/2024 Palantir’s stock increased 0.3% today, trading as high as $45.14 and with a trading volume of 14,740,149 shares. 10/25/2024 Palantir is set to release its third-quarter financial results on November 4th, following the market’s close. Wall Street analysts are forecasting a profit of $0.05 per share, representing a substantial 66.7% year-over-year growth compared to the $0.03 per share earned in the same period last year. 10/24/2024 Palantir’s stock price has risen sharply over this past year by more than 150%. While this is great news for investors, analysts on Wall Street are divided about the stock’s future, with many worried that the price will fall again in the near future. Palantir’s Results After Four Years The following is a table that summarizes the performance in share price, revenues, and profits (net income) of PLTR from its inception in 2020 through the second quarter of 2024: Share Price Revenues Net Income 2020 $23.55 1.092 1.166 2021 $18.21 1.541 .520 2022 $6.29 1.905 .373 2023 $17.17 2.225 .209 TTM $26.32 2.479 .404 Revenue and net income in $billions Since going public, Palantir saw its revenue grow by 35.44%, while net income fell by 65.35%. That drop in net income can be easily attributed, though. The company’s IPO in 2020 raised $2.6 billion, but that was shortly followed by 2022’s year-long bear market. Nonetheless, by 2023, the Big Data firm was able to reach profitability for the first time in its then 20-year history. The momentum has continued with a series of earnings beats, most recently on Aug. 7, 2024, when the company reported earnings per share (EPS) of $0.09, which beat analysts’ estimates by 10.55%, and revenue of $678.23 million, which beat by 3.94%. The EPS beat was Palantir’s fourth consecutive and marked the sixth quarter in the last seven when it outperformed consensus. The company ended fiscal 2023 with around $3.7 billion in cash and liquid investments and — notably — no debt. Key Drivers of Palantir’s Stock Performance Palantir’s Expansion and Adoption of AI and Machine Learning Platforms: In addition to its AI bootcamps, the company offers clients four platforms to help manage, analyze, and secure their sensitive data. The first, AIP, focuses on introducing AI into companies’ operations. Foundry, Palantir’s operating system for modern enterprises, allows customers to harmonize and automate decision-making in complex settings while bridging the divide between core business and operating teams with data teams and modeling teams. Gotham, its third platform, focuses on a global scale, with the company billing the software as the weapons system for decision-making, which has extensive applications in defense and combat. Finally, Palantir’s Gotham platform is an operating system for continuous delivery with a focus on deployment — that is, integrating a machine-learning model into a production environment. Palantir is also making a strong push into modular sales to attract smaller clients and scale them with customer solutions as they grow. This strategy will significantly expand Palantir’s customer base and provide years of earnings growth. Government demand: Palantir’s revenue from government sources has outperformed revenue from commercial sources each year since 2020, with notable growth every year. In 2023, government-sourced revenue regifted $1.222 billion compared to $1.002 billion for commercially-sourced revenue. The company’s government clients include the United States Intelligence Community and the United States Department of Defense (DoD). Palantir’s software as a service (SaaS) is one of only five that are authorized for the DoD’s Mission Critical National Security Systems. By revenue, the U.S. government is the company’s largest client, and with ever-growing defense spending as a fixture of the U.S. federal government’s budget, the relationship is ripe. Bottomline, government demand is still core to Palantir, and with modular sales, the company will pack a double punch of private and public Space partnerships: On June 27, 2024, Palantir signed a strategic partnership with Voyager Space with the aim of leveraging its AI intelligence to drive innovation in space technology. According to its press release, Voyager will now fully integrate Palantir’s AI capabilities into its defense solutions, enhancing communications, military research and development, and bolstering intelligence and space research with the end goal of making space more accessible to the defense community. Voyager will be using Palantir’s Foundry platform. This marks the second strategic space partnership for the company, which also signed an agreement with Starlab Space on June 20, 2024. In this deal, Palantir became the exclusive supplier of enterprise-wide software data management solutions for the Starlab commercial space station — a planned low Earth orbit venture that is expected to launch no later than 2028 and is a joint venture between Starlab and Airbus. Palantir (PLTR) Stock Prediction in 2025 The current consensus median one-year price target for Palantir’s stock is $37, which represents a downside potential of -38.25%. 24/7 Wall Street’s 12-month forecast projects Palantir’s stock price to be $47 with earnings per share coming in right at $0.43. We see strong CAGR growth in sales of government contracts, upwards of 26% annually, and have factored for $3.186 billion in forecast revenue. Palantir (PLTR) Stock Forecast Through 2030 Year Revenue Net Income EPS 2025 $3.467 $1.178 $0.47 2026 $4.198 $1.465 $0.56 2027 $5.203 $1.686 $0.71 2028 $6.185 $2.050 $0.87 2029 $7.300 $2.496 $1.06 2030 $8.482 $2.990 $1.27 Revenue and net income in $billions How Palantir’s Next 5 Years Could Play Out We expect to see revenue growth of just over 20% and EPS of 47 cents for 2025. We expect the stock to still trade at a similar multiple next year, putting our estimate for the stock price for Palantir at $58 in 2025, which is -3.72% lower than the stock is trading today. We also expect the company to surpass $1 billion in free cash flow in 2025, with $1.052 billion. Going into 2026, we forecast steady year-over-year increases for both revenue and net income of just over 21% and nearly 24%, respectively. 24/7 Wall Street’s price prediction for 2026 is $81, an upside of 34.46% over today’s stock price. We expect to see a larger increase in revenue for 2027, and by extension, a larger gain in net income, which could breach $1 billion for the first time. Estimates are for revenue increases of 24% and an EPS increase of 23%, resulting in an annualized EPS of $0.71. We also forecast Palantir to surpass $2 billion in free cash flow by posting $2.380 billion. The stock price prediction for 2027 is $92, up 52.72%. After breaching $1 billion in net income in 2027, we expect PLTR to take another step forward in 2028 by posting revenue of $6.104 billion, net income of $1.432 billion, and an annualized EPS of $0.79. We also forecast that the company will exceed $3 billion in free cash flow, posting $3.372 billion. The stock price for 2028 comes in at $102, an upside of 69.32%. We expect revenue to increase to $7.208 billion for an 18% year-over-year gain, with net income growth of 22% and EPS coming in at $1.06, good for a 22.78% year-over-year gain. We also forecast free cash flow to surpass $4 billion by posting $4.566 billion. But our price-to-sales multiple will be lower as growth slows, and the price projection for the year is $114, an upside of 89.24% above today’s stock price. Palantir Stocks Price Target for 2030 On the back of forecast revenue in excess of $8 billion, we expect Palantir’s net income to surpass $2 billion for the first time, and post an EPS of $1.27. We expect free cash flow to approach $6 billion by posting $5.895 billion. The price projection for 2030 is $125, an upside of 107.50% over today’s stock price. Year Price Target 2025 $58 2026 $81 2027 $92 2028 $102 2029 $114 2030 $125 Revenue and net income in $billions “The Next NVIDIA” Could Change Your Life If you missed out on NVIDIA’s historic run, your chance to see life-changing profits from AI isn’t over. The 24/7 Wall Street Analyst who first called NVIDIA’s AI-fueled rise in 2009 just published a brand-new research report named “The Next NVIDIA.” Click here to download your FREE copy. The post Palantir Technologies (PLTR) Price Prediction and Forecast 2025-2030 appeared first on 24/7 Wall St..
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