Palantir (NYSE:PLTR) stock seems unstoppable right now. The big data company has emerged as a top pick among investors over the past year, thanks to its strategic positioning to capitalize on the most significant trend of the moment: AI.
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The stock has been gaining more ground last week due to a recent positive development. On Wednesday, the company announced that it has been awarded a $178 million contract extension by the U.S. Army for the TITAN (Tactical Intelligence Targeting Access Node) program, a battlefield system powered by advanced AI/ML.
Palantir will be responsible for creating 10 TITAN prototypes, comprising five advanced and five basic models, along with the incorporation of crucial new technologies. Initially, both Palantir and defense contractor Raytheon were awarded 14-month contracts worth $36 million each for phase 2 of the prototyping work. However, for the final phase, the Army chose Palantir exclusively. TITAN also incorporates systems, technologies, and software from a diverse range of vendors, including Northrop Grumman, Anduril Industries, and World Wide Technology.
Mizuho’s Gregg Moskowitz, a 5-star analyst rated in the top 2% of the Street’s stock pros, notes the significance of the win, saying: “This represents a big extension from its prior June 2022 award, and includes both software and hardware solutions to further enhance the U.S. Army’s first AI- and ML-driven ground station.”
The latest development is indicative of a company moving in the right direction. However, the only direction for the shares has also been up over the past 12 months (having soared by 239%), making current levels less palatable for Moskowitz.
“We are encouraged by PLTR’s recently improved execution, which includes healthy 4Q revenue upside that was driven by impressive US commercial growth,” the analyst explained. “Moreover, we believe that PLTR has a promising opportunity to meaningfully monetize its AI capabilities going forward. That being said, we believe further multiple expansion may be challenging at current levels.”
Bottom-line, Moskowitz remains on the sidelines with a Neutral rating while his $21 price target suggests the shares will post a 22% decline in the months ahead. (To watch Moskowitz’s track record, click here)
Looking at the consensus breakdown, with 6 Holds, 5 Sells and 2 Buys, the analysts view this stock a Hold (i.e. Neutral). The average price target is slightly lower than Moskowitz’s objective; at $19.64, the figure factors in ~25% drop from the current trading price. (See Palantir stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
