Palantir Stock Worth 80% More? Wedbush's Ives Bumps Up Price Target On 'Off-The-Charts' Q4 Success From 'Messi Of AI'

Zinger Key Points
  • Wedbush's price target revision is due to the "off the charts commercial success Palantir is finding with AIP.
  • Due to the strength in the commercial business, the firm sees free cash flow could approaching $1 billion in 2024.

Palantir Technologies, Inc. PLTR reported fourth-quarter revenue that surpassed forecasts and bottom-line results in line with expectations, marking the fourth consecutive quarter of GAAP profitability. A bullish analyst raised the price target for the stock.

“The Messi of AI Delivers in World Cup Fashion,” he said.

The Palantir Analyst: Wedbush’s Daniel Ives maintained an Outperform rating and raised the price target from $25 to $30, a 20% upward adjustment, suggesting scope for 79.43% upside potential.

The Palantir Thesis: The price target revision is due to the “off-the-charts commercial success Palantir is finding with AIP out of the gates,” said Ives in a note.

“A handful of times every decade there are tech companies that are so ahead of the competition and in a sweet spot of the future growth…yet the Street at the time dismisses it by dusting off their long-term stubborn bear thesis,” Ives said. On Monday, Palantir went from an “off-Broadway play” to a “primetime Broadway theater right off of Times Square under the bright lights,” he added.

The analyst noted that Palantir’s commercial business grew at an “eye-popping” 70% in the fourth quarter and the commercial customer count grew 44%, thanks to the artificial intelligence revolution driving AIP deal flow.

“It’s clear that as AI use cases explode enterprise CIOs are looking towards [Alex] Karp & Co. as the AI golden child for a platform to build out AI frameworks for the future,” the analyst said.

See Also: Best Artificial Intelligence Stocks

While shrugging off the choppiness in the Government business segment, Ives said the “story, growth, and ultimate re-rating is around Palantir’s U.S. commercial business which is estimated to show growth of
at least 40% in 2024.”

Due to the strength in the commercial business, the analyst said free cash flow could approach $1 billion in 2024. He also sees an S&P 500 inclusion on the near-term horizon.

“In a nutshell, PLTR remains an undiscovered gem and a core part of our thesis in the AI Revolution just now taking shape across the tech world,” said Ives.

Price Action: In premarket, the stock climbed 17.46% to $19.64, according to Benzinga Pro data.

Read Next: Jim Cramer Admits Palantir CEO Alex Karp’s ‘Insanity Is Growing On Me’ After Q4 Earnings Call: ‘Narrative Is Compelling’

Photo by Spyro the Dragon on Shutterstock

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Posted In: Analyst ColorEarningsEquitiesLong IdeasNewsPrice TargetReiterationTop StoriesAnalyst RatingsTechTrading IdeasAIartificial intelligenceDaniel IvesExpert IdeasStories That MatterWedbush
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