Palantir (PLTR) stock blasted higher this week on a huge earnings beat but what stood out more than the exceptional numbers was the war-like rhetoric, coming at a time of heightening US-China tensions over trade and intellectual property.
Maximize Your Portfolio with Data Driven Insights:
- Leverage the power of TipRanks' Smart Score, a data-driven tool to help you uncover top performing stocks and make informed investment decisions.
- Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio
“Welcome to our Palantir revolution,” began CEO Alex Karp in the earnings call, which was smattered with references to drastic changes taking place in artificial intelligence (AI), U.S. rivalry with China and the nature of the military-industrial complex. It was a call that got analysts talking and raising price targets.
Palantir in Revolutionary Mindset
“We are at the way beginning of a revolution. And we plan to be a cornerstone, if not the cornerstone company, in driving this revolution in the U.S.,” added Karp, who thinks this revolution will play out over decades.
The AI revolution was the cornerstone of the call, at least. In fact, there were no fewer than 13 mentions of the word “revolution” in the call with analysts. Karp explained it simply: the company plans to do “really unexpected things and to win.”
Karp also lent into the company’s role in the military and intelligence services, saying that PLTR is helping to make “America more lethal.” And Karp used the call to praise Elon Musk’s efforts to cut waste through the newly-minted Department of Government Efficiency (DOGE). A significant portion of PLTR earnings are derived from the Department of Defense.
Meanwhile, as Washington and Beijing square up over trade this week, he offered a stark assessment of the relationship with China, saying bluntly that “we are at war.”
For Karp, this is an economic war that started “long ago” marked by the greatest IP theft and wealth transfer in history.
BofA Cries ‘Vive La Revolution’
Analysts at Bank of America Securities reckon this is not a drill, with five-star analyst Mariana Perez Mora saying 2024 was simply a dress rehearsal.
“The company sees the world ripe for an AI and technology revolution. We see PLTR enabling and leading this revolution in both Commercial and Defense markets,” she said.
BofA raised its price target on the stock to a Street high $125. Among multiple price target upgrades Goldman Sachs raised their price target on PLTR to $80 from $41, while Citi raised the firm’s price target on Palantir to $110 from $42.
“There’s a revolution. Some people get their heads cut off,” said Karp. Investors who’ve bought in on these earnings will be hopeful they are the ones with the ax.
PLTR Earnings Topped Estimates
The comments on the call came after PLTR reported earnings per share beat at $0.14 versus the $0.11 expected on revenues of $828 million compared with $776 million expected.
U.S. revenue for the quarter rose 52% year-over-year, with overall revenue growth at 36%. U.S. government revenue for Fiscal year 2024 grew 30% year-over-year to $1.2 billion, with growth accelerating to 45% in this segment in Q4. U.S. commercial revenue in the fourth quarter grew 64% year-over-year and 20% quarter-over-quarter to $214 million.
Is PLTR Stock a Buy?
PLTR stock has a consensus Hold rating among 18 Wall Street analysts, based on two Buy, 11 Hold, and five Sell recommendations issued in the last three months. The average PLTR price target of $88.60 implies over 12% downside risk from current levels.
