Palantir (PLTR) stock soared more than 25% Tuesday morning as investors cheered the defense software maker's latest artificial intelligence advances.
“We have never seen the level of customer enthusiasm and demand that we are seeing now. [artificial intelligence platforms] Palantir Chief Financial Officer Ryan Taylor told investors on an earnings call Monday night.
The software company's artificial intelligence platform (AIP) was mentioned nearly 50 times throughout the call. And Palantir says this is a key reason it expects U.S. commercial revenue to rise nearly 40% in 2024.
The hype around AI has sent many tech stocks soaring, which is also why stock prices have risen more than 100% over the past year. Tuesday's market action comes amid calls that Denver-based Palantir's stock is already overvalued, even if Wall Street believes some of the trades extend beyond fundamental support. Even if you believe that, it's the latest sign that investors aren't fully satisfied with AI trading.
“We're incredibly bullish on Palantir,” Morningstar equity analyst Malik Ahmed Khan told Yahoo Finance Live. “If you look at our forecasts, you'll see that we're beating consensus on things like profitability and revenue.”
“At the same time, Palantir's current valuation cannot be rationalized in the base case,” he added.
Jefferies equity analyst Brent Till rated Palantir a “sell” in the company's earnings report, but acknowledged in a post-release research note that AIP growth was faster than expected. But even after upgrading the stock to a hold rating, Till still warned about the cost of the stock.
“The biggest concern is valuation. [the] “The stock is trading at a 23% premium to the large-cap average,” Till wrote.
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