Palantir (NYSE:PLTR) shares spiked nearly 20% in Tuesday’s pre-market trading following a Q1 earnings beat and the company’s outlook on staying profitable in each quarter of 2023. It also impressed investors with upbeat talk about its new artificial intelligence platform (AIP), demand for which is “without precedent.” The first iteration of AIP will be available to select customers this month.
The data analytics software maker explained that its new AI platform will help companies in the commercial and government sectors leverage the power of large language models on their proprietary datasets. Palantir has already held many discussions with potential customers about AIP and is currently negotiating terms and pricing for access to AIP’s components.
The company’s experience with large language models and generative AI helped in the quick launch of AIP, “the demand for — of which is nothing I’ve ever seen in 20 years of being involved in Palantir,” said CEO Alex Karp during the Q1 earnings call.
The CEO added that the company has built the frameworks, infrastructure, and software required to address product design challenges as well as safety and trust issues associated with AI. Palantir is accelerating its efforts to ensure that its customers can rapidly deploy AIP beside the company’s Gotham and Foundry offerings to transform their operations.
Explaining the power of its new AI platform, Palantir said that it deployed a pre-release version of AIP at a major insurance company and built a collaborative AI agent in a few days to automate claims processing. The company intends to increase its investments in the development of advanced software capabilities, mainly its AI offerings, while sustaining GAAP profitability.
Is Palantir a Good Stock to Buy?
Following the Q1 print yesterday, Goldman Sachs analyst Gabriela Borges reiterated a Hold rating and slightly increased the price target to $9 from $8. While the analyst believes in Palantir’s potential to introduce a differentiated AI offering, she looks forward to more details on the monetization and pricing of AIP.
Borges remains sidelined on the stock due to the lack of visibility and disclosures, mainly around the government side of the business.
Wall Street’s Hold consensus rating for Palantir stock is based on two Buys, seven Holds, and five Sells. The average price target of $8.75 suggests 13.1% upside.
