AI Stocks: Why Palantir Technologies Is Not for Everyone

Stock Market

Palantir Technologies (NYSE:PLTR) was quick to pivot toward the artificial intelligence (AI) technology trend of 2023. That was a smart move, and PLTR stock surged higher in the first half of the year. Now, however, Palantir Technologies presents a mixed but mostly favorable picture for prospective investors.

Analysts are generally lukewarm in their sentiment toward Palantir Technologies. Furthermore, the company has been profitable but only by a few pennies per share. Still, depending on your goals and perspective, you might cobble together a convincing argument to invest in Palantir Technologies.

You’ll Be Surprised to Know Who Likes PLTR Stock

We’ve seen reports that momentum-stock maven Cathie Wood and, believe it or not, personal finance expert Suze Orman like and/or have held PLTR stock. So, even if the analyst community isn’t 100% bullish about Palantir Technologies, at least the company apparently has some famous fans.

We also found out that Renaissance Capital LLC added to its Palantir share position in this year’s third quarter. So, why would Wood, Orman and Renaissance Capital favor Palantir Technologies?

Perhaps, they understand Palantir isn’t your average data analytics company. Palantir Technologies is also a go-to provider of services to entities seeking to enhance their AI functionalities. For instance, Palantir has a contract with the Department of Defense, valued at up to $250 million through 2026, to help multiple U.S. military entities scale up their AI/machine-learning capabilities.

Wedbush analyst Dan Ives expects AI technology stocks to “rip higher.” Clearly, Palantir is immersed in the AI tech revolution, so investors seeking immediate exposure to this might consider buying PLTR stock.

A Bearish Outlook for Palantir Technologies

Palantir Technologies has reportedly secured a five-year contract with the United Kingdom’s National Health Service. Apparently, Palantir will provide the NHS with AI tools and help to enhance the agency’s data analysis capabilities.

While the NHS contract could net Palantir Technologies hundreds of millions of dollars, not every expert on Wall Street is impressed. Reportedly, William Blair analyst Louie DiPalma gave PLTR stock an “underperform” rating. Plus, he declined to publish a price target on the shares.

Moreover, DiPalma figured that the analyst consensus revenue estimate of $2.6 billion in 2024 for Palantir Technologies already included a full financial contribution from the aforementioned NHS contract. DiPalma also seemed to be concerned about competition from Palantir’s industry rivals.

DiPalma’s points are duly noted. However, they might not be a deal breaker for investors seeking to capitalize on Palantir Technologies’ lucrative public-sector contracts.

PLTR Stock: It’s a Personal Decision

Today might be a good day to consider your investment objectives. Are you seeking more portfolio exposure to the data analytics and AI software fields?

Or, do you already have more than enough AI market exposure already? This may be the case if you own index funds with technology stocks.

Ultimately, deciding whether to own PLTR stock is a personal decision. The most important thing is to conduct your full due diligence on Palantir Technologies before making any decisions.

On the date of publication, Louis Navellier had a long position in PLTR. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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