Wedbush Securities analyst Dan Ives predicts Palantir Technologies Inc. PLTR could emerge as a dominant force in the artificial intelligence software landscape, comparing it to industry giants Oracle Corp. ORCL and Salesforce Inc. CRM.
What Happened: In a CNBC interview on Tuesday, Ives highlighted the multiplier effect of AI infrastructure spending, noting that “for every dollar spent on Nvidia chip, there’s an 8 to $10 multiplier across tech, across the ecosystem software.” He emphasized that this trend is particularly evident in companies like Palantir and Salesforce.
The analyst’s bullish stance on Palantir comes amid the company’s remarkable stock performance, with shares up nearly 350% over the past year. The AI software firm recently reported strong fourth-quarter results, with revenue reaching $827.52 million, exceeding analyst expectations of $775.91 million.
Ives pointed to Jevons Paradox – an economic theory suggesting increased efficiency leads to higher demand – as a key driver of AI software adoption. “This is the software age that’s now starting to take place,” Ives stated, predicting “a massive spending wave in 2025.
Why It Matters: The optimistic outlook aligns with Palantir CEO Alex Karp‘s recent shareholder letter, where he described the current period as “the beginning of the first act of a revolution.” The company’s growth is particularly strong in U.S. operations, with commercial revenue up 64% year-over-year to $214 million.
Despite Palantir’s high valuation metrics, including a price-to-earnings ratio of 613.95 and market capitalization of $258 billion, former hedge fund manager Martin Shkreli projects the company’s cash flow from operations to reach $1.8 billion in 2025 and $2.7 billion by 2026, suggesting potential justification for the premium valuation.
The stock’s consensus price target stands at $65.50, based on 23 analyst ratings. The highest target is $125, while the lowest is $7.50. The most recent ratings from Citigroup, RBC Capital, and UBS suggest an average price target of $85, implying a 24.95% downside from current levels.
Price Action: Palantir stock has surged 340% in 2024, trading within a 52-week range of $20.33 to $116.76. It closed at $112.62 on Tuesday, down 3.45%, with a slight 0.56% after-hours recovery, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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