Palantir hits record closing high after analyst upgrade
The gains over the last year are nearing 500%.
Shares of retail favorite Palantir closed Friday at a new record high after the highly valued defense, data, and AI software company received a bullish initiation from analysts at Piper Sandler.
“No doubt, PLTR carries a rich valuation premium and remains a high-risk investment, but it also has a one-of-a-kind growth+margin model,” wrote analysts at the Minneapolis-based investment bank and brokerage. They continued:
“We see PLTR as an AI secular winner and initiate at Overweight with a $170 PT. Given shares are hyper-volatile with a dozen 20-29% drawdowns, we recommend investors be patient and take a ‘buy on a drawdown’ approach to build new positions.”
While there’s an element of euphoria surrounding the stock, which for years has been championed by a group of passionate retail shareholders known as Palantirians, Piper Sandler argues there is a fundamental basis for the excitement.
“PLTR is expensive by all measures but remains the only public AI platform that could sustain 30%+ growth and a 40%+ [operating margin] model,” they wrote.
Theory would suggest that maintaining such levels of growth and profitability should be extremely difficult, as Palantir’s success inevitably invites competitors to try to get a piece of the action. The company’s recent run of earnings has bought it a lot of credibility with investors. But its sky-high valuations — its forward price-to-earnings ratio is almost 240x — suggest expectations are just as high, with the company’s next quarterly report due August 4.
