Palantir Technologies (PLTR) has seen its stock soar 61% in November, driven by strong financial results and the growth of its Artificial Intelligence Platform. The company’s third-quarter earnings showed a 30% year-over-year increase in revenue to $726 million, with earnings per share growing 100%. This marks the eighth consecutive quarter of profitability for Palantir.
The primary driver of its growth is Palantir’s AI platform, which uses company-specific data to solve real-world business problems. The company has seen a significant jump in U.S. commercial revenue, increasing by 54% year over year, and its customer count rose 77%. This has led to an increase in remaining deal value (RDV), which is expected to drive future growth.
Several analysts have boosted their price targets for Palantir, citing the potential for major AI initiatives within the U.S. government and the commercial adoption of AI. The company’s stock transfer to the Nasdaq exchange on November 26 has also contributed to its surge, as it may lead to increased demand for the stock and upward pressure on the share price.
Investors should consider Palantir’s valuation metrics, however. The stock currently trades at 175 times forward earnings and 43 times forward sales, which is relatively high. A more appropriate valuation metric, the forward price/earnings-to-growth (PEG) ratio, puts Palantir’s valuation at 0.54, indicating an undervalued stock.
For investors with a long-term perspective and a willingness to take on higher risk, Palantir may be worth considering despite its lofty valuation.
Source: https://www.fool.com/investing/2024/12/02/why-palantir-technologies-stock-surged-61-in-novem