Palantir Stock: Buy at the High?

Palantir Technologies (PLTR) has been a standout performer in the tech sector, with its stock price surging 101% in 2024. The company's inclusion in the S&P 500 index on September 23rd has further boosted its appeal to institutional investors, with Bank of America hiking its price target to $50 from $30. However, the question remains: is Palantir stock still a buy at these elevated levels?

Palantir's AI capabilities and market potential are undeniably attractive. The company ranks among the leading AI platforms, according to research firm Forrester, and its AI platform has seen significant traction with over 1,300 bootcamps completed since 2023. Palantir's AI product ramp, particularly its generative AI, is expected to spur growth in the commercial market. Moreover, the company's strategic partnership with Microsoft further enhances its market position.


Palantir's government contracts, such as Project Maven and TITAN, have also contributed to its stock performance. The U.S. Army's extension of the Maven Smart System contract and the Department of Defense Chief Digital and Artificial Intelligence Office's (CDAO) award of a $480 million contract over a 5-year period demonstrate the company's strong relationship with the government. These contracts not only provide a steady revenue stream but also validate Palantir's AI capabilities.


Palantir's international business expansion, particularly in Europe, has also been a significant driver of its stock performance. The company's AI capabilities are in high demand globally, and its expansion into new markets is expected to fuel further growth.

However, it is essential to consider Palantir's valuation and revenue growth trends. While the company's Relative Strength Rating stands at 98 out of a best-possible 100, its valuation may be a concern for some investors. Palantir's revenue growth has decelerated in recent years, with a slowdown from 47% in 2020 to 17% in 2023. Although the company's Q2 earnings topped expectations, analysts with bearish views continue to question its valuation.

In conclusion, Palantir stock's performance in 2024 has been impressive, driven by its AI capabilities, strategic partnerships, government contracts, and international business expansion. However, investors should carefully consider the company's valuation and revenue growth trends before making a decision. As always, it is crucial to conduct thorough research and consult with a financial advisor before investing.