In 2024, Palantir Applied sciences (NASDAQ: PLTR) proved that it is considered one of right this moment’s key expertise leaders. The software program firm reported report revenue, noticed income climb quarter after quarter within the double digits, and was invited to hitch the S&P 500. Palantir ended the 12 months with the perfect efficiency in that benchmark because the inventory soared a mind-blowing 340%.
Immediately, although, some traders have been hesitant about getting in on Palantir at this stage of the story, as valuation has reached a excessive stage from a ahead price-to-earnings perspective. Nonetheless, if we think about Palantir’s anticipated progress, this firm on the transfer may make a fantastic funding. Two income drivers, specifically — synthetic intelligence (AI) and the business buyer — may be getting began.
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On high of this, a catalyst for Palantir is simply across the nook on Feb. 3. Will Palantir inventory surge after that date? Here is a take a look at what historical past says.
Picture supply: Getty Photographs.
The Palantir story up to now
Earlier than I get to that, this is a fast abstract of the Palantir story. This software program firm is not a brand new child in on the block — it has been round for greater than 20 years. It solely entered the inventory market in current instances, launching an preliminary public providing (IPO) in 2020. All through its historical past, Palantir primarily has been related to authorities contracts, however over the previous few years, it is seen main progress from business clients.
Palantir’s software program platforms assist its clients combination all of their knowledge — which frequently is disparate — and use this knowledge to make game-changing selections, form a technique, and extra. In 2023, Palantir launched its Synthetic Intelligence Platform (AIP), harnessing the facility of enormous language fashions and AI applied sciences within the data-driven decision-making course of.
Demand for AIP has soared, and this can be partly attributable to Palantir’s genius approach of introducing the platform to potential clients. Palantir holds boot camps, or periods to assist a future buyer go from zero to a use case in just some hours.
As I discussed above, AIP has been a key progress driver in current quarters. It additionally has helped one other development acquire momentum: the business buyer’s use of Palantir software program. These clients have been flocking to Palantir, serving to business income enhance within the double digits from quarter to quarter. And U.S. business buyer depend, at solely 14 simply 4 years in the past, has now reached about 300.
A report revenue
All of this has helped Palantir attain a report internet revenue of $144 million in the newest quarter. Contemplating the overall demand for AI solutions and the scale of the present business buyer base, it is possible that much more progress could also be forward for the corporate.
Now let’s transfer on to the upcoming catalyst. On Feb. 3, Palantir will likely be reporting fourth-quarter earnings — providing us a current view of how these progress drivers are progressing. There’s motive to be optimistic about what the corporate might say.
“That is the software program century, and we intend to take all the market,” Palantir Chief Govt Officer Alex Karp wrote in his newest letter to shareholders. He is additionally spoken of “unrelenting” demand for AI programs.
What historical past says
A take a look at historical past ought to assist when wanting forward at Palantir’s potential post-earnings efficiency. Although tendencies do not all the time repeat themselves, they provide a information as to potential possible outcomes. Within the month following Palantir’s previous 5 earnings experiences, Palantir inventory has climbed 4 of these instances. And the will increase every have been within the double-digits, with the largest being a 68% acquire within the month following the third-quarter 2024 earnings report late final 12 months.
Contemplating all of this, will Palantir soar after Feb. 3? As I discussed earlier, some traders say Palantir is pricey, buying and selling at 166x forward earnings estimates. However the firm’s ahead PEG ratio of 0.3 — under the extent of 1 that signifies a inventory is overvalued — suggests the inventory nonetheless makes an affordable purchase.
Palantir’s stable earnings observe report and demand for its software program are optimistic factors, too, and historical past reveals us traders typically react positively after the tech-player’s earnings experiences. All of this implies there’s motive to be optimistic about Palantir inventory scoring one other win and hovering after Feb. 3.
Don’t miss this second probability at a probably profitable alternative
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Proper now, we’re issuing “Double Down” alerts for 3 unimaginable corporations, and there is probably not one other probability like this anytime quickly.
*Inventory Advisor returns as of January 27, 2025
Adria Cimino has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Palantir Applied sciences. The Motley Idiot has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
