Palantir Technologies (NASDAQ: PLTR) has emerged as one of the top-performing stocks over the past year, fueled by the company’s strategic expansion into artificial intelligence (AI).
Building on its impressive 2024 gains, the stock has carried momentum into the new year.
However, PLTR faced resistance near the $80 mark in the latest trading session, closing at $78.98. This represents a modest year-to-date increase of 5%, while the equity boasts a staggering 380% gain over the past year.
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AI predicts PLTR stock price
Regarding the stock’s price movement, Finbold consulted its AI tool to project how PLTR might trade on February 1, 2025. According to data retrieved on January 26, the average prediction for February 1 is $78.43, reflecting a marginal decline of 0.7%.
Among the tools, OpenAI’s ChatGPT-4o and ChatGPT-4o Mini offered the most optimistic outlooks, predicting prices of $80.50 and $82.50, respectively.
Both models cited positive market momentum, the potential for a “golden cross,” and stability in interest rate expectations as key growth drivers. ChatGPT-4o Mini is the most bullish, emphasizing broader macroeconomic factors that could amplify gains.
In contrast, Claude 3 Opus forecasts a notable decline to $74.21, citing potential risks from market sentiment and interest rate fluctuations despite recent momentum. Meanwhile, Grok 2 Vision adopts a more tempered view, projecting $76.50 and pointing to stable but cautious technical indicators.
Palantir fundamentals
Although the AI tool forecasts a minor drop in PLTR’s value, the stock still benefits from strong underlying fundamentals tied to its AI ventures, focusing on government and commercial clients.
Palantir has notable government contracts, including partnerships with entities such as the military, which have been vital to its revenue growth. For example, in Q3 2024, the government segment generated $320 million—a 40% year-over-year increase.
Simultaneously, the company targets large enterprises through its Artificial Intelligence Platform (AIP). The commercial segment recorded notable growth in the last quarter, rising 54% to $179 million. Palantir closed 104 deals worth over $1 million and grew its customer base by 39%, signaling sustained growth in the coming quarters.
Looking ahead, analysts are projecting significant revenue growth for the American software company. In Q4 2024, revenue is estimated at $776.78 million, a 27.69% year-over-year increase. Notably, Palantir is set to announce Q4 2024 results on February 3, 2025. For Q1 2025, revenue is forecasted at $798.92 million, up 25.95% from the prior year.
For 2024, Palantir’s total revenue is expected to reach $2.8 billion, a 25.86% increase from 2023. This growth trend is expected to continue in 2025, with revenue projected at $3.49 billion, reflecting 24.74% annual growth.
Analyst raises PLTR price target
Meanwhile, some on Wall Street remain bullish on PLTR’s prospects. For instance, Wedbush Securities analyst Dan Ives raised PLTR’s price target to $90 from $75 while maintaining an “Outperform” rating on the shares, expressing confidence in the company’s AI strategy, which he has dubbed the ‘Messi of AI.’
Ives believes Wall Street is undervaluing Palantir’s U.S. commercial AI business, which is bolstered by its strong competitive edge and could surpass $1 billion in revenue in the coming years.
He also noted that AI initiatives within the U.S. government, particularly the Department of Defense, are accelerating under the Donald Trump administration, providing an additional growth tailwind.
Despite strong fundamentals and an optimistic Wall Street outlook, one lingering concern around PLTR is its valuation. Palantir has a price-to-earnings (P/E) ratio of 480.44, which is extremely high compared to the market average. As such, a section of Wall Street warns the stock might crash if the company fails to meet its growth targets.
Featured image via Shutterstock
