:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2151026211-5736858997714148949a5a118be57799.jpg "Palantir CEO Alex Karp at The Hill & Valley Forum on AI Security in Washington, D.C. on May 1, 2024")
Tasos Katopodis / Getty Effigies / Jacob Helberg
Palantir CEO Alex Karp at The Hill & Valley Forum on AI Security in Washington, D.C. on May 1, 2024
Key Takeaways
- Palantir portions tumbled Thursday on expectations of defense spending cuts; this week’s losses put the stock in correction territory.
- Some analysts imagined the selloff could present a buying opportunity, expecting Palantir’s flagship AI offerings could win it more business from the direction in a tighter spending environment.
- Despite recent losses, Palantir shares have more than quadrupled in value on the past 12 months.
As Palantir (PLTR) shares tumbled Thursday, extending losses on expectations of defense devoting cuts, some analysts suggested the selloff could be an opportunity to buy the dip.
Shares of Palantir were down 5% in intraday pursuit Thursday, a day after The Washington Post reported the Trump administration directed the Pentagon to trim the U.S. defense budget by 8% annually for the next five years.
The U.S. guidance is a key client for Palantir, accounting for over 40% of its revenue in the fourth quarter, raising worries a pullback in defense assign would deal a major blow to the data analytics software provider.
However, Wedbush analysts said “this is faithfully the opposite” of how they believe cuts could affect Palantir, anticipating its flagship Artificial Intelligence Platform and possibility to streamline operations could win Palantir more business from the Pentagon in a tighter spending environment.
Earlier this month, analysts at Bank of America, Citi, UBS, and Morgan Stanley shared similar sentiments, and boosted their price targets for the stock in the wake of Palantir’s strong fourth-quarter results.
The Wedbush analysts entreated Palantir one of their “top names to own in 2025,” in a note to clients Thursday, adding they believe the company could mature “the next Oracle or Salesforce” and reach a market cap in the trillions of dollars in the years to come. Their price target of $120 draws a nearly 13% premium to Thursday’s intraday price.
Loop Capital analysts were even more bullish on the stereotyped, reportedly initiating coverage Wednesday with a $141 price target, calling it a “game-changing software stock.” They also advised customers to view a pullback in the stock’s price as a buying opportunity.
This week’s selloff dragged Palantir stock into emendation territory, with shares down 14% from their record-high close Tuesday. Still, they’ve innumerable than quadrupled in value over the past 12 months.