TLDR
- Palantir Technologies (PLTR) ended a 5-day losing streak following concerns about planned 8% reductions in US military spending
- The cybersecurity market is projected to grow from $172.24 billion in 2023 to $562.72 billion by 2032
- Palantir’s full fiscal year 2024 showed 29% year-over-year revenue growth to $2.87 billion
- US commercial revenue increased 54% to $702 million while US government revenue rose 30% to $1.20 billion
- Loop Capital analyst Mark Schappel initiated coverage with a Strong Buy rating and price target of $141
Palantir Technologies ended its five-day losing streak on Wednesday following pressure stemming from US Defense Secretary Pete Hegseth’s announcement of planned reductions in military spending.
The defense-focused data analytics company had been experiencing downward pressure after Hegseth revealed plans to cut US military spending by 8% over the next five years.
This development raised concerns among investors about Palantir’s government contracts, which represent a substantial portion of the company’s revenue.
Despite these short-term concerns, Palantir delivered strong financial results for fiscal year 2024. Total revenue grew 29% year-over-year to $2.87 billion.
The company showed impressive performance in its US operations. US revenue increased by 38% compared to the previous year.
This growth was driven by exceptional performance in the commercial sector. US commercial revenue surged 54% to reach $702 million.
Palantir’s government business also showed healthy growth. US government revenue rose 30%, totaling $1.20 billion for the fiscal year.
The company demonstrated strong cash generation capabilities. Palantir produced $1.15 billion in cash from operations during the year.
Adjusted free cash flow showed even stronger performance. This metric surged to $1.25 billion, highlighting the company’s improving profitability.
In December 2024, Palantir entered a strategic partnership with Booz Allen Hamilton. The partnership aims to accelerate innovation in defense missions.
This collaboration combines strengths in AI and cybersecurity. The goal is to enhance secure data integration and analytics for the US Department of Defense.
The broader cybersecurity industry continues to experience remarkable growth. Global cybercrime damages are projected to reach $10.5 trillion annually by 2025, up from $3 trillion in 2015.
This growing threat landscape is driving increased spending across industries. Sectors such as finance, healthcare, and government are investing heavily in data protection.
Market analysts predict continued expansion in the sector
Market analysts predict continued expansion for the cybersecurity sector. The global cybersecurity market is expected to grow from $172.24 billion in 2023 to $562.72 billion by 2032.
This represents a compound annual growth rate of approximately 14.3%, according to Fortune Business Insights.
Loop Capital appears optimistic about Palantir’s prospects. Analyst Mark Schappel recently initiated coverage with a Strong Buy rating.
Schappel set a price target of $141 for Palantir stock. This represents substantial upside potential from current trading levels.
The company’s position in AI and data analytics continues to attract attention from hedge funds. According to recent data, 63 hedge funds held positions in Palantir stock.
This places Palantir fifth in a ranking of high-growth cybersecurity stocks based on hedge fund interest. The ranking considered companies with market capitalizations over $2 billion and minimum 20% revenue growth over five years.
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