Will Palantir’s stock reach $100 following the Q4 earnings report?
The stock price of American software giant Palantir (NASDAQ:PLTR) is currently performing well and has the potential to further rally after the company’s Q4 2024 earnings report. Prior to the earnings release on February 3, PLTR has experienced a strong recovery, rising above the $80 mark. In the latest trading session, the stock ended up 1.56% at $82.49. Despite the market downturn caused by the DeepSeek sell-off, the equity has gained an impressive 11.68% over the past week.
Palantir’s venture into artificial intelligence (AI) continues to be a significant driver of the company’s revenue. It is anticipated that Palantir will report earnings for the last quarter of 2024 that will exceed analysts’ estimates.
In the quarter ending September 2024, the technology firm surpassed revenue expectations by 2.9%, generating $725.5 million in revenue, a 30% year-over-year increase. However, it fell short of billings estimates. Analysts forecast a 27.4% year-over-year revenue growth of $775 million for the last quarter of 2024, with adjusted earnings of $0.11 per share. While Palantir has missed revenue estimates in the past two years, analysts have maintained their expectations, indicating a steady performance leading up to the earnings report.
If the stock surpasses estimates, it could trigger the next rally, potentially reaching the $100 mark, which would require a growth of 21% from the current valuation.
It is worth noting that Palantir experienced a surge of over 300% last year, driven by increased demand for its Artificial Intelligence Platform (AIP) and additional contracts in both government and commercial sectors. The inclusion of Palantir in the S&P 500 and Nasdaq-100 indexes further boosted its growth trajectory.
Various analysts have offered their perspectives on Palantir’s path toward $100. Wall Street remains divided on the stock’s potential for further growth. On one hand, there is an optimistic outlook, citing the potential for a breakout in the AI industry. However, concerns have been raised about the stock’s current valuation, with some arguing that it is disconnected from its fundamental growth, particularly considering its price-to-earnings ratio of 498.50.
A particularly bullish outlook for Palantir comes from Dan Ives of Wedbush Securities, who raised his PLTR share price target from $75 to $90. He expressed confidence in the company’s AI strategy and its potential to reshape enterprise software, comparing it to the soccer player Messi in the field of AI.
On the other hand, Jefferies has consistently taken a bearish stance on Palantir. Despite acknowledging its strong fundamentals, analyst Brent Thill reaffirmed his “underperform” rating on the stock and predicted a drop in its price over the next 12 months, with a fair valuation closer to $28. Thill argued that Palantir is significantly overvalued, trading at 50 times its NTM revenue.
There are concerns that signs of buyer exhaustion regarding Palantir stock have emerged. To predict the stock’s movement by February 28, Finbold used its AI model. The model predicts that Palantir stock will rise to $85, a 3.04% increase from its current price of $82.49. Other AI models also indicate positive momentum and stable macroeconomic conditions, with no signs of a bearish trend. Grok 2 Vision sees stabilization at $85 due to strong sector momentum and favorable interest rates.
For Palantir stock to reach $100, it would need a 21% rally from its current price, which seems feasible given its recent significant rise, potentially fueled by the upcoming earnings report. However, to sustain this price in the long term, a favorable macroeconomic environment and a continued bull market would be necessary. While a lot of growth is already factored into the stock price, Palantir can only justify these levels if it maintains its trajectory over the coming years. This is uncertain, and the stock may experience pullbacks along the way.
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