TLDR:
- Palantir stock has surged over 150% in 2024 due to AI enthusiasm
- Wall Street analysts are mostly bearish, with a median price target implying 38% downside
- Palantir reported strong Q2 results, with customer base up 41% and revenue up 27%
- The stock trades at a very high valuation of 137 times adjusted earnings
- Analyst Ed Ponsi predicts further gains despite overbought conditions
Palantir Technologies, the data analytics company known for its work with government agencies, has seen its stock price skyrocket in 2024. Shares have surged over 150% year-to-date, driven by enthusiasm around the company’s artificial intelligence capabilities and strong financial results.
In the second quarter of 2024, Palantir reported encouraging numbers that seemed to justify some of the stock’s gains. The company’s customer base increased 41% compared to the previous year, while the average customer spent 14% more.
This led to a 27% rise in revenue to $678 million and an 80% jump in adjusted earnings to $0.09 per share. CEO Alex Karp attributed the strong performance to demand for the company’s Artificial Intelligence Platform (AIP).

Palantir has received recognition for its AI capabilities from some industry analysts. Forrester Research praised the company’s leadership in machine learning and AI platforms, while Dresner Advisory Services ranked Palantir highest among AI and data science software vendors.
The company’s primary platforms, Gotham and Foundry, allow users to ingest data, develop machine learning models, and generate insights to improve decision-making.
However, not all analysts are convinced of Palantir’s technological edge. Gartner scored the company below many competitors for its data integration tools, and some analysts have questioned whether Palantir’s offerings are truly differentiated in the AI space.
Despite these disagreements, Palantir’s stock continued to climb throughout 2024. The company’s inclusion in the S&P 500 index in September provided another boost, even though this change did not fundamentally alter Palantir’s business prospects.
The main concern for many analysts is Palantir’s valuation. With the stock trading at 137 times adjusted earnings, it appears extremely expensive even considering the company’s growth rate. Wall Street expects Palantir’s adjusted earnings to increase by 22% over the next year, which still leaves the stock looking overvalued by most traditional metrics.
Some analysts, like Ed Ponsi, remain bullish on Palantir despite the high valuation. Ponsi has accurately predicted further gains for the stock and compares CEO Alex Karp to tech visionaries like Steve Jobs and Elon Musk. He believes Karp’s unique leadership style and personality are helping drive investor enthusiasm.
Looking ahead, Palantir could benefit from several potential catalysts. Increased institutional coverage and ownership following its addition to the S&P 500 may bring more attention to the stock. Strategic partnerships, like recent deals with Microsoft and Oracle, could lead to new business opportunities. And Palantir’s strong position in AI for defense and government applications may drive further growth as these sectors increase their technology investments.
However, risks remain. The company will need to continue innovating and expanding its product offerings to justify its lofty valuation. There’s also the possibility that investor enthusiasm around AI could cool, leading to a sell-off in Palantir and other AI-related stocks.
As of October 2024, Palantir’s market capitalization stands at $96 billion – a hefty price tag for a company with $2.5 billion in trailing twelve-month sales.
While the company has shown impressive growth and has several potential catalysts, its high valuation leaves little room for error. Investors will be watching closely to see if Palantir can continue to deliver the kind of results needed to support its soaring stock price.
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