Palantir's S&P 500 Inclusion 'Another Validation Moment' As It Embarks On New Era Of Enterprise Growth And Profitability, Says Bullish Analyst

After a couple of quarters of snubbing, S&P Dow Jones Indices announced late Friday that Palantir Technologies, Inc. PLTR will be added to the S&P 500 Index, effective prior to the start of trading on Sept. 23. A bullish analyst on Sunday weighed in on the development.

Validation Moment: Wedbush analyst Daniel Ives noted that Palantir’s inclusion in the S&P 500 Index was a highly anticipated moment investors had been eagerly awaiting throughout the past year. “The profitability profile of this story has significantly been bolstered with this another validation moment for the Palantir story,” the analyst said.

Skeptics have underestimated the profitability and cash flow potential of Palantir, according to the analyst. He sees the company’s in-house artificial intelligence platform, or AIP, and the U.S. Commercial business to be the core drivers of the business model going forward.

The AIP provides “action-driven logic for Palantir’s customers through its AI tools and guidance on how to accomplish specific tasks where tools allow the AI to propose and undertake real-world actions,” Ives said. “Human operators have full visibility into the execution rules and history for automation while remaining in the loop for approving AI-proposed actions,” he added.

Ives expects Palantir to continue to generate further momentum within the federal sector over the coming years, given its AI capabilities will be deployed safely, securely, and responsibly.

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Multi-Year Cycle: This is the start of a “multi-year cycle” for Palantir and the company can continue to generate significant deal flow on the back of AIP, Ives said. More organizations are looking to add AI capabilities that provide value and innovation in real-time across operations, he added.

“In a nutshell, getting added to the S&P 500 Index is an important moment in the Palantir story that we believe marks a new era of enterprise growth and profitability over the next few years,” the analyst said.

Wedbush has an Outperform rating and a $38 price target for Palantir stock.

Palantir ended Friday’s session up 0.56% at $30.33, according to Benzinga Pro data. In after-hours trading, the stock climbed nearly 8% following the announcement concerning the S&P 500 inclusion.

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