Palantir (PLTR) Stock Trades Up, Here Is Why

Petr Huřťák /
2023/06/12 11:55 am EDT

What Happened:

Shares of data-mining and analytics company Palantir (NYSE:PLTR) jumped 5.96% in the morning session after Bank of America analyst Mariana Perez raised the stock's target price from $13 to $18 and maintained a Buy rating. The analyst expressed increased optimism in Palantir, stating that the company is uniquely positioned to capitalize on the opportunities presented by artificial intelligence (AI). This has been an area of interest and debate of late, and Perez is certainly taking a stand that this is a way to play the megatrend. Perez also emphasized Palantir's extensive experience in areas such as legal, privacy rights, and data security, which she believes differentiates the company from its competitors. After the initial pop the shares cooled down to $15.53, up 3.44% from previous close.

What is the market telling us:

Palantir's shares are very volatile and over the last year have had 45 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move was about one month ago, when the company gained 15.1% on the news that the company reported first-quarter results that beat analysts' revenue, free cash flow, adjusted EBITDA, and earnings per share estimates. Customer growth also came in strong, rising by 41% year-over-year and 7% sequentially. However, revenue guidance for the next quarter came in below Consensus. Despite this, management noted that the company is expected to remain profitable every quarter through the end of the year. Additionally, the company provided some updates on the adoption of its AI technology, stating that "the depth of engagement with and demand for Palantir's new Artificial Intelligence Platform (AIP) is without precedent." Overall, the company's Q1 results continued to highlight the improvements in cash management and profitability.

Palantir is up 143% since the beginning of the year. Investors who bought $1,000 worth of Palantir's shares at the IPO in September 2020 would now be looking at an investment worth $1,640.

Is now the time to buy Palantir? Access our full analysis of the earnings results here, it's free.